Dutch global design giant Arcadis has posted a €27m loss for 2018, blaming a goodwill impairment of €40m in the Middle East.
It said it is "taking decisive actions to turnaround the underperforming businesses".
Earlier headwinds in the Middle East caused us to be more selective, in order to de-risk our portfolio. This resulted in lower revenues and, as a consequence, we impaired goodwill– Peter Oosterveer, Arcadis chief executive
A large project was cancelled, and there have been "project write-offs and provisions", the company said yesterday.
Revenues from the region dropped 39% in the last quarter and 17% over the year as it got more selective about projects. Its order backlog declined by 57%.
Arcadis said it has taken "firm measures" to "turn around lagging performance" in Asia, as well, where it also warned of project write-offs and provisions.
Overall the company said performance was good, however, with a "significantly improved balance sheet", organic net revenue growth of 3% to €2.4bn and gross revenues of €3.3bn, net working capital improved to 15.1%, and a strong free cash flow of €149m.
"There is no denying that 2018 has been a challenging year for Arcadis," said chief executive Peter Oosterveer, "but we are pleased with the growth in the majority of our business, the strengthening of our balance sheet, as well as with the actions taken to improve our performance."
"We are taking decisive actions to turnaround the underperforming businesses. Earlier headwinds in the Middle East caused us to be more selective, in order to de-risk our portfolio. This resulted in lower revenues and, as a consequence, we impaired goodwill."
He added: "In Asia, we appointed new leadership and are executing the plan to focus on profitable core businesses, to exit certain countries and phase-out activities that underperform."
The company said it would propose to maintain its dividend at €0.47 per share.
Image: Development of Musheireb Downtown project, Doha, 2013 (Alex Sergeev/CC BY-SA 3.0) Â