Arabtec's latest guidance on how it will provision against future delays in client payments has dampened enthusiasm among investors for the Dubai builder.
The emirate's largest construction company is owed more by clients than it posted in revenues last year.
At the end of the year, receivables stood at Dh5.7 billion. That is equivalent to more than a year of revenues, or 374 days of sales at the company.
Analysts say Arabtec has to increase its provisioning in case of further delays in payments.
At the end of last year, the company's provisions had decreased 11.4 per cent to Dh265 million, from Dh299m in 2009.
Speaking to reporters this week, Ziad Makhzoumi, Arabtec's chief financial officer, did not address analysts' concerns about the company's level of provisioning.
But he did address reverse provisioning, the practice of recording as earnings money a company had previously set aside as provisions.
"We're not doing reverse provisions yet," Mr Makhzoumi said. "With the market going the way it is, I think it is prudent to wait until possibly the end of the year."
Habib Sassi, an analyst who covers the company at Menacorp Alternative Investments brokerage, said it was not out of the ordinary for the company not to reverse provisions at this stage, given its Dh15bn backlog of projects. But he said investors were disheartened that Mr Makhzoumi did not commit to future provisioning.
"We knew they would not be doing this. What he is answering are questions about existing provisions, but what we want to know is about additional provisions. That is what matters," said Mr Sassi.
Since 2009, Arabtec has faced growing difficulties in being paid on time by multiple clients, including Nakheel and other major Dubai developers.
Mr Sassi said that on average the company had to wait a year to be paid for projects that had been sold.
Arabtec shares closed 1.5 per cent higher yesterday at Dh1.36 on the Dubai Financial Market.
