Shares of Arabtec fell yesterday to their lowest level in a month after the contractor announced that several senior staff were leaving the firm as part of a new round of restructuring.
Arabtec closed 2.7 per cent lower at Dh2.48 in Dubai.
The company said the chief financial officer Iyad Abdul Rahim, the human resources and administrative officer Yazan Hatamleh, and the general counsel Wassel Al Fakhoury had resigned.
Following a meeting on April 30, its board of directors had told senior management to “implement a plan for continuing to foster the company’s growth and expansion”, Arabtec said.
“The company has determined that it is necessary to undertake a reorganisation of [its] business to optimise cost savings with a view to enhancing overall profitability,” the company said. It has appointed Ravi Murthy, who has worked at Arabtec for 18 years, as its new acting chief financial officer. “We will continue implementing our strategy aiming to increase productivity and efficiency to win new projects,” Arabtec said.
This is the second restructuring to take place at the company over the past 12 months.
Mr Abdul Rahim, Mr Al Fakhoury and Mr Hatamleh were appointed during the former chief executive Hasan Ismaik’s tenure. Mr Ismaik’s plan for the business involved building a holding company that would also oversee new ventures into the oil and gas, infrastructure and power markets.
After his departure last summer, Arabtec said it was restructuring to focus on its core construction markets. In January it added that it had “completed an internal restructuring of its subsidiaries” at technical and managerial levels.
Arabtec declared a loss of Dh321.4 million for the first quarter of this year, compared with a profit of Dh151.8m in the same period a year earlier.
When asked how many roles might be affected by the latest shake-up, a spokesman said it was too early to say and that the “new structure is not finalised yet”.
However, the spokesman said that the company was focused on cutting costs.
Sanyalaksna Manibhandu, the chief equities analyst at National Bank of Abu Dhabi, said he did not think the latest round of restructuring was good news for shareholders.
“You have a company here that has been shedding staff, and it’s been going on for more than 13 months,” he said.
“What the market needs to see is some stability and improved quarterly profit numbers.”
He pointed to the fact that Arabtec had posted consecutive losses during the last quarter of last year and the first quarter of this year, and added that further restructuring was also likely to have an effect on its bottom line.
“What you need to see is some stability before investors are attracted back to the company. There has been lots of volume in stock trades, but a lot of this is from traders.”
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