* Bidding on residential, hotel project in Baku, MEED says
* Next foray into ex-Soviet states as moves away from Dubai
* Earnings due Tuesday or Wednesday, shares flat
* Doubles stake in local construction equipment supplier
By John Irish
DUBAI, March 2 (Reuters) - Dubai contractor Arabtec Holding ARTC.DU is bidding for a major property development in Azerbaijan, a magazine reported on Tuesday, the latest effort to expand overseas to weather a downturn in its home market.
Arabtec, which earlier on Tuesday said its board had agreed to raise its stake in UAE-based House of Equipment, is expected to release its full-year results by Wednesday. [ID:nLDE62100U]
London-based magazine MEED reported on its website (www.meed.com) Arabtec was vying for the contract to build the Crescent - a complex of five high-rise residential and commercial towers and a 360-room five-star hotel on the shores of the Caspian Sea.
It did not give the source of the information.
U.S.-based engineering and design firm AECOM Technology Corp (ACM.N) was last year awarded a construction management contract from Gilan Holding on the project, which is expected to be completed by 2013.
Arabtec has been aggressively expanding internationally over the last few months to diversify its portfolio away from Dubai, where property prices have fallen some 50 percent from their peaks and billions of dollars worth of projects have been cancelled or put on hold.
Arabtec stopped work on one of troubled Dubai developer Nakheel’s [NAKHD.UL] largest housing projects because it had not been paid by the Dubai World-owned [DBWLD.UL] firm, its chief executive said on Feb 25.
Riad Kamal said no payments had come through from the developer since December’s $10 billion cash injection from Abu Dhabi.
The move into Azerbaijan represents Arabtec’s latest foray into the former Soviet states. It is working on a $2.7 billion contract to build a 400-metre tower for Russia’s Gazprom Neft (SIBN.MM), the world’s biggest gas producer.
The largest UAE contractor by market value posted a 35 percent fall in net profit for the third quarter. It made 511.7 million dirhams ($139.4 million) in the first nine months of 2009.
Analysts polled by Reuters have on average forecast a Q4 result of 172.43 million dirhams, down 6.7 percent from 184.81 million dirhams on the year earlier period.
The firm’s full-year profit for 2008 was 945 million dirhams
“We forecast full year 2009 revenue of 8.2 billion dirhams and profit (pre-writedowns) of 779 million dirhams,” said Ian Munro, MAC Capital head of research. “There is potential for auditors to request that Arabtec takes receivable writedowns of 100 million to 200 million dirhams, which may affect the underlying quality of the result,” he said.
Arabtec will more than double its stake in House of Equipment, which sells, manages, rents and services construction equipment, to 66.7 percent.
Arabtec this week extended the due diligence to sell a 70 percent stake to Abu Dhabi’s Aabar Investments AABAR.AD to April 16. [ID:nLDE61R03B]
Arabtec’s shares were flat at 0803 GMT.
Additional reporting by Matt Smith; editing by David Cowell