Dubai-listed Arabtec swings to annual loss, blames real estate slowdown

Arabtec, which was involved in the construction of the Louvre Abu Dhabi, posted its first annual loss since 2016. (Reuters)
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Updated 16 February 2020

Dubai-listed Arabtec swings to annual loss, blames real estate slowdown

  • Arabtec, which was involved in the construction of the Louvre Abu Dhabi, posted its first annual loss since 2016
  • Dubai has faced a slowing real estate market for most of the previous decade

DUBAI: Dubai-listed Arabtec Holding swung to a 774.5 million-dirham ($210.9 million) net loss in 2019 from a profit of 256.3 million dirhams in 2018, the construction company reported on Sunday.
Arabtec, which was involved in the construction of the Louvre Abu Dhabi, posted its first annual loss since 2016, according to Refinitiv data.
The company blamed the loss on its core construction business, citing a slowing real estate sector where there have been limited new projects launched.
Dubai has faced a slowing real estate market for most of the previous decade, with the exception of a brief pick up more than six years ago.
Development of some non-real estate projects across the United Arab Emirates have also slowed or been halted.
Arabtec also cited low liquidity in the real estate sector, settlement and recoverability claims and estimated losses from an investment in an associate company for the loss.
It did not name the associate company.
Other business units, including industrial and engineering, remained profitable, it said.
Revenue fell 21 percent to 7.78 billion dirhams and Group Chief Financial Officer Adel Al-Wahedi resigned, it said in bourse statements.
The company also said it’s closely working with “key lenders” to align its debt with its business needs and is cutting costs by reducing its workforce.
Discussions and due diligence of a potential merger with Trojan, announced in September, continue to take place, it said.


Kuwait props up coronavirus-hit economy amid low oil prices

Updated 01 April 2020

Kuwait props up coronavirus-hit economy amid low oil prices

  • Kuwait was first Gulf state to halt passenger flights and impose a partial curfew to stem the spread of coronavirus
  • Kuwait has drawn down on its state fund, the General Reserve Fund, to cover its deficit

KUWAIT: Kuwait announced measures early on Wednesday aimed at shoring up its economy against the coronavirus pandemic, including soft long-term loans from local banks, and the central bank asked banks to ease loan repayments for companies affected.
Kuwait, which as of March 31 had registered 289 coronavirus cases, was the first Gulf state to halt passenger flights and impose a partial curfew to stem the spread of the highly infectious respiratory illness.
The sectors most impacted by the pandemic include aviation, hospitality and real estate, a government source told Reuters.
The stimulus package approved by the cabinet aims to provide liquidity for small- and medium-sized enterprises to meet their obligations, a government spokesman said.
That includes directing government agencies to pay obligations to the private sector as soon as possible.
The central bank separately has asked lenders to postpone loan repayments for three months for companies hit by the crisis, the governor, Mohammad Al-Hashel, said in a television interview posted by the central bank on Twitter.
Kuwait is also dealing with the impact of lower oil prices on its finances that is expected to lead to a higher government fiscal deficit this year.
The government source said that, in light of the oil price fall, passing a debt law allowing Kuwait to borrow more has become a “government priority.”
Kuwait has drawn down on its state fund, the General Reserve Fund, to cover its deficit. The source said the government withdrew 43.8 billion Kuwaiti dinars ($139.70 billion) in the five years until the 2018-2019 fiscal year, and 3.7 billion dinars in the 2019-2020 fiscal year.
This means the fund has around 14 billion dinars ($44.65 billion) left, the source said.
Moody’s this week placed Kuwait’s Aa2 rating on review for a downgrade, citing a “significant” decline in government revenues.
The government spokesman said maintaining Kuwait’s credit rating was one of the goals of the new economic measures.