Dubai: Arabtec, UAE’s biggest construction company by market capitalisation, said on Sunday its net profit in the three months to September fell 32.6 per cent due to non-recurring general expenses despite rising revenues, sending the shares lower.

Arabtec recorded a net profit of Dh68 million in the third quarter as against Dh101 million. Revenues in the same period rose 24 per cent to Dh2.4 billion.

“The numbers are disappointing; the third quarter was different from [the] first two. Profits margins have compressed and expenses have grown,” said Sanyalaksna Manibhandu, manager research, National Bank of Abu Dhabi Securities.

In the nine months to September, Arabtec’s net profit rose 20.7 per cent to Dh309 million driven by its business growth in the local and overseas markets. Revenues jumped 37.2 per cent to Dh6.96 billion.

The gross margin recorded during the period increased to about 13.9 per cent compared to a margin of 11.9 per cent as supported by the improvement in the projects’ performance and expenditure control.

The gross profit for the nine-month period amounted to Dh971 million, recording a significant growth of 60.5 per cent compared to the same period last year. Shares of Arabtec fell nearly 5 per cent after the announcement.

“The significant growth made in the financial indices points to more progress in the company’s activities and higher returns to the investors,” the company said in the statement.

Confidence

Arabtec shares climbed 11.5 per cent last week as Abu Dhabi state fund Aabar Investments raised its stake in the firm to 34.9 per cent by buying shares held by former chief executive Hassan Esmaik, who abruptly resigned in June.

The increase in stake reflects the strategic relationship between the two companies, in addition to the confidence that Arabtec gained from investors and shareholders.

The company said the actions taken on expenses saving and a successful restructuring process has positively impacted the company at various levels.

Regarding the one million housing units in Egypt, Arabtec expressed its satisfaction with progress of the final negotiations with authorities in Cairo, which took place recently through intensive meetings on the final agreement to kick off the project.

The company plans to start execution of the project before year-end.

In March, Arabtec announced it would build one million homes in Egypt in a $40 billion project backed by the Egyptian and UAE governments, as part of efforts to ease the country’s housing shortage.