Arabtec sees 2008 profit soar to $272m
Dubai, December 24, 2008
Dubai-based construction firm Arabtec Holding expects to post profit of "just over Dh1 billion ($272.3 million) and plans to issue bonus shares to boost liquidity, newspapers reported on Wednesday.
The profit forecast of Arabtec's chief financial officer, cited by daily Gulf News, would be at least 87 per cent above the Dh535.19 million of net profit Arabtec made in 2007, according to Reuters calculations.
Arabtec shareholders also approved a plan to issue one bonus share for ever share held, Ziad Makhzoumi said after an extraordinary general meeting on Tuesday, according to Gulf News.
Arabtec chairman Riad Kamal said the firm had decided not to pay a dividend to shareholders this year and would instead issue bonus shares to increase its capital, thereby reducing its reliance on bank loans during a credit crunch.
"We issued the bonus shares to give us a more solid financial base for current and future commitments," Kamal was quoted as saying by The National.
The capital increase would be used "either for investments or if there are any delays in receiving payments, then you can use your own cash to ensure you don't delay payments to subcontractors and suppliers", he said.
Shares of Arabtec tumbled 9.93 per cent on Tuesday and are down almost 60 percent this year.
The firm made profit of Dh760.19 million in the first nine months of the year, indicating its fourth-quarter profit would be at least Dh239.81 million, up about 25 percent from the year-earlier period.-Reuters