Arabtec incurs net loss of $216.2m in H1 2020 due to 'limited liquidity'
The company is seeking an advisory firm for a capital and debt restructuring, later decision will be made to dissolve the firm or not
Arabtec Holding, listed on the Dubai Financial Market, has reported a net loss of $216.2m (AED794m) in the six-month period ending 30 June, 2020, due to ‘limited liquidity’ in the real estate and construction sector.
Revealing the H1 2020 financial results in a stock market missive, the company said that the net loss was directly attributed to the group’s construction business under the name Arabtec Construction.
Other reasons for the accumulated net loss also include, limited settlement and recoverability of contractual claims; the effect of COVID-19, which resulted in reduced progress on projects and additional costs; limited number of new contract awards due to a bearish real estate sector.
The company’s financials were in green in H1 2019, as it had posted a net profit of $13.3m (AED49m).
Revenues in H1 2020 dropped by 39.2% to $823.8m (AED3.01bn) from $1.2bn (AED4.12bn) in the same period in 2019.
Meanwhile, other core businesses including Target, Arabtec Engineering Services and EFECO “traded profitably and remained well-positioned” within the industrial, infrastructure, and mechanical, electrical and plumbing (MEP) sectors.
Arabtec Holding has been in talks to appoint an advisory firm to assist the management in a capital and debt restructuring process.
The company said that in the upcoming General Assembly that will be held in the next 30 days, the shareholders will be required to vote on whether the company should be dissolved or determine the most appropriate restructuring plan.
Last month, Target Engineering Construction Company was awarded a contract worth $53.3m (SAR200m) from Saudi Aramco for the replacement of five storage tanks at Ras Tanura Refinery in the Kingdom’s Eastern Province.