Arabtec Q4 Threefold Profit

Dubai Arabtec Holding proposed a dividend of five fils ($0.14) per share Thursday after witnessing a three-fold increase in fourth-quarter net profit.

The Dubai-based builder’s shares fell 2.67 per cent to Dh8.87 ($2.42) on the Dubai Financial Market (DFM) General Index following the announcement. According to Reuters calculations, Arabtec’s fourth-quarter profit surged three-fold to Dh165.8 million ($45.15 million), against Dh54.7 million ($14.89 million) in the corresponding period in 2010.

However, full-year profit fell 15 percent to Dh260.5 million ($70.93 million), while revenue declined eight per cent to Dh5 billion ($1.36 billion), the company said in a statement to the DFM.

“The main thing to look for now is how this will affect Arabtec winning projects in Abu Dhabi; the company is big enough to secure large contracts,” said Samer Darwiche, a Dubai-based associate at Gulfmena Investments.

“Most investors booked profits in Arabtec yesterday as the stock has been performing well year-to-date. However, the numbers have not been a big factor in Arabtec’s rally; the main driver was Aabar Investments increasing its stake in the company,” he added.

Darwiche also said Arabtec’s cash dividend came as a surprise despite fourth-quarter results beating estimates due to higher efficiency. “The dividend yield is low compared to what other UAE listed companies have paid out, especially lenders, but balance sheets are healthier in the banking sector,” he said.