SEARCH USING PROPERTY FILTERS
Choose Category       Buy    Rent    Residential   Commercial
     
Price Range
Bed Rooms
QUICK SEARCH
Keyword Search    Buy   Rent

Balfour Beatty racks up £15m losses at Middle East unit

Balfour Beatty, Britain’s biggest builder, has blamed problems with two projects for £15 million (Dh81.9m) of losses from its Middle Eastern division.

The builder, which operates in the UAE through joint ventures Dutco Balfour Beatty and BK Gulf, reported that its regional arm had made the underlying losses because of writedowns caused by disputes with main contractors on the two unnamed schemes.

“The mechanical and electrical engineering market remains very difficult, with some of the same issues faced by the UK M&E business existing in the Middle East, such as disputes and delays with main contractors who have taken on complex and difficult jobs,” the company said.

“In particular two significant projects have caused write-downs, even though we believe a significant proportion of these will be ultimately recoverable,” it added.

A Balfour Beatty spokesman declined to name the projects which had caused the writedowns, calling the information “commercially sensitive”.

Previous projects the company’s joint ventures have been involved in include a Dh150m contract to build a clubhouse and golf academy at the stalled Tiger Woods Dubai golf course scheme in 2009 and work to provide electrical and mechanical systems at the abandoned Trump International Hotel and Tower project on Palm Jumeirah. In a statement accompanying its full year financial results, Balfour Beatty added that the situation was so bad that its Middle Eastern joint ventures were no longer bidding for mechanical and engineering work outside the UAE.

The news follows last month’s announcement from the UAE’s largest mechanical electrical and plumbing contractor Drake & Scull International that profits fell 71 per cent in the final quarter of 2014, driven lower by a slowdown in the Saudi and UAE property markets.

And on Sunday, the UAE’s largest contractor Arabtec reported a Dh94.4m loss for the final three months of last year.

Balfour Beatty revealed its Middle Eastern losses amid more general gloomy financial results on Wednesday as the company reported a £59m loss for the full year and cancelled dividends.

“So far the company has given little clarity about what exactly is causing these losses for the mechanical and engineering division,” said Mark Howson, an analyst at Canaccord Genuity.

Source: lbarnard@thenational.ae

Contact Us - Book Viewing NOW
Post property listings in Abu Dhabi