The Dubai construction firm that built the world’s tallest building lost more than $626m last year as building slows amid a slump in oil prices.
Arabtec Holding, which built the Burj Khalifa, yesterday released its 2015 results, showing a loss of AED 2.3 billion ($626.2m) in 2015, compared to a profit of AED 215 million the previous year.
Revenues of AED 7.3 billion were down 12% on 2014, the company said in a statement to the Dubai Financial Market.
Arabtec said results were hurt by "the continuing difficult environment … and the challenging economic backdrop," as well as several "poorly performing projects."
(Arabtec is pursuing) a more selective approach to project tendering, ensuring new projects deliver appropriate returns– Acting chief executive Saeed Al Mehairbi
Backed by Abu Dhabi’s state-run Aabar Investments, the company ran into difficulties after the sudden departure of its chief executive in 2014.
It said a programme of cost-cutting and restructuring would continue this year.
Among its troubles is the stalling and confusion over a $40bn deal signed in 2014 to build a million affordable homes in Egypt.
The firm also admitted to having trouble getting paid. It said all the group’s entities are "vigorously seeking full recovery of receivables due" and that the company would enforce its rights where payments were not made.
Acting chief executive Saeed Al Mehairbi said 2015 had been a difficult year for all regional contractors "given the uncertain economic backdrop".
He said the group is pursuing "a more selective approach to project tendering, ensuring new projects deliver appropriate returns".
Nevertheless he hailed a "bright start to the year" with two major project wins in January. The first is a $544m (AED 2 billion) contract to build a thousand villas for Aldar Properties’ West Yas Island scheme.
The second is a letter of intent from Bahrain’s transport ministry concerning the $1.1bn modernisation of Bahrain International Airport, which Arabtec hopes to undertake with Turkey’s TAV Construction.
Excluding the Bahrain airport project, Arabtec’s order backlog stood at $5.25bn (AED 19.3 billion) at the end of December, the company said.
Photograph: A police helicopter hovers over Dubai at sunset, with the Burj Khalifa, built by troubled Arabtec, in the background (Mehdi Nazarinia/Wikimedia Commons)