Abu Dhabi
Construction giant Arabtec has not terminated any of its projects as a result of recent management changes and a restructuring of the company, its chairman confirmed on Wednesday, adding that the company retains the support of major shareholder, Aabar Investments.
Chairman Khadem Al Qubaisi said that Aabar considered Arabtec a long-term investment, and that investors had misunderstood the significance of the small reduction in stakes. Abaar had reduced its stake in early June from 21.57 per cent to 18.94 per cent.
“Arabtec is financially strong, and is capable of executing all the projects that we have talked about … Our project in Egypt is currently in the design phase. There are some slight changes with the project but it is in design, and it is on its way,” Al Qubaisi said.
The project in Egypt aims to build one million homes.
Arabtec’s projects inside and outside UAE are valued at Dh26.2 billion.
Stock market performance
The announcement came at a press conference on Wednesday to respond to market rumours regarding Arabtec. The conference was the company’s first since a series of events in June shook investors’ faith in the real estate developer, slashed its share prices, and dragged down the entire stock market.
However, the chairman responded to such accusations saying that Arabtec is not behind the crash on Dubai Financial Market (DFM). Al Qubaisi said the DFM index had been plummeting due a drop in all companies’ value, as well as political tension in the Middle East.
Arabtec closed at Dh3.31 on Wednesday, up 14.93 per cent.
He urged investors to study the market well before buying shares, and not to jump into conclusions about Arabtec because this creates rumours, which lead to a drop in share prices.
“Are [investors] buying our shares because of Khadem Al Qubaisi or because of [former Chief Executive Officer] Hasan Ismaik? No. They buy [Arabtec shares] because fundamentally speaking, they reviewed the company, and according to that, they put a target price,” Al Qubaisi said.
Ismaik, who owns a 28.85 per cent stake in Arabtec, resigned from his position as CEO on June 18, and was replaced on the same day with board member Mohammed Al Fahim.
Discussing rumours surrounding Ismaik, the chairman said that, “Ismaik has nothing to do with the running of the company or its administration.”
He declined to comment on Ismaik’s stake in the company, though.
As for projections for share prices, Al Qubaisi said he was in no position to discuss that.
“The most important goal for me is the company’s performance whether share prices are worth Dh1 or Dh20,” he said.
Financial results:
The chairman also confirmed that Arabtec has not been affected financially by the performance of its stocks on the DFM, and expected positive quarterly results.
“We are going to announce the financial quarterly results very soon. We cannot disclose any numbers now, but I would like to assure shareholders that the figures are going to be positive,” he said, adding that the results are expected to come out by the end of July.
Layoffs
In late June shortly after Ismaik’s resignation, Arabtec terminated a number of staff without disclosing names or designations.
Asked about the issue, Al Qubaisi said that the company is in a restructuring phase where it is trying to focus on its core business, which is construction.
“We terminated the right people. A lot of executives had been hired and they did not have a place in the company. We are now replacing them with people who have experience in construction and real estate,” he said, without giving details about the number of staff to be hired.
— With inputs from Reuters
