Arabtec, the Dubai-listed contracting giant that built the world’s tallest building, the Burj Khalifa (pictured), posted a loss this week of $257m (AED945m) in the third quarter of 2015, citing "the difficult regional construction market".
Its share price fell 9.4% on the news to AED1.25 in early trading on Wednesday, its lowest value since May 2013.
The loss, posted 11 November on the Dubai bourse, compares with a net profit of $18.8m (AED69m) in the same quarter last year.
The Board recognises that the regional construction market is currently very challenging, a dynamic that is expected to persist throughout the remainder of 2015 and possibly into early 2016– Arabtec statement
Revenues in the third quarter declined by 24% to $436m (AED1.6bn) compared with $572m (AED2.1bn) in Q3 2014.
It signals ongoing woes for the company, which is in the middle of a restructuring and cost-reduction programme.
In August Arabtec announced a loss of just over $271m (AED998.1 million) in the first half of 2015, compared with a profit of $65.4m (AED240.3m) in the first half of 2014.
"The Board recognises that the regional construction market is currently very challenging, a dynamic that is expected to persist throughout the remainder of 2015 and possibly into early 2016," Arabtec’s statement this week said.
"Accordingly, the Board remains confident in its cost reduction strategy and the implementation of the restructuring programme, ensuring Arabtec’s operations are as lean, flexible and efficient as possible to service its clients."
Arabtec said it has introduced "a more selective approach to project targeting", and claimed that cost-cutting measures had realised annualised savings of more than $25.9m (AED95m). More cost cutting would come in 2016, the company said.
On the plus side, the company says its order backlog remains healthy, valued at more than $5bn (AED18.7bn), and that it "continues to improve its operational capabilities".
Arabtec had been in talks to deliver a massive, $40bn scheme to build a million affordable homes in Egypt, but uncertainty now surrounds the plan.
Photograph: Arabtec’s most famous project, Dubai’s Burj Khalifa, the world’s tallest building (Wikimedia Commons)
