Arkan Building Materials reports millions in losses

Abu Dhabi: Arkan Building Materials Co, the UAE-based construction supplier, suffered a net loss of Dh291.6 million for the year ended December 31, while in the previous year it reported a net profit of Dh202.7 million.

The company's core business of cement and blocks continued to perform well with revenue increasing 8.8 per cent year on year and gross profit climbing 27.7 per cent.

The company reported a net loss of about Dh450.5 million in the fourth quarter as it booked losses on equity investments and the value of its steel inventory declined, announced in a filing to the Abu Dhabi Securities Exchange (ADX) yesterday.

In 2008, Arkan recorded a net loss on the value of investments of Dh100.27 million and a writedown of Dh429.5 million against the value of its steel inventory.

The writedown provision for steel inventory, and the loss on the valuation of investments at fair value through the profit and loss account caused the losses for the year.

Shareholders' equity declined to Dh1.62 billion from Dh2.08 billion at the end of 2007.

The company has a portfolio of regional stocks whose market value witnessed a huge drop, especially in the last quarter of 2008.

Prices for most building materials also fell during 2008 and the inventory of steel rebars the company carried declined substantially in value during the fourth quarter

Revenues for this year have risen to Dh695.16 million from Dh346.36 million.

The company's share price rose about 20 per cent in February.