Arabtec's commitment to build what may be Europe's tallest tower was not enough to overcome investor concerns about third-quarter earnings.
The stock closed 0.9 per cent down to Dh2.15 yesterday and was the most actively traded in Dubai.
Arabtec made a net profit of Dh111.1 million in the second quarter, compared with Dh183.9 million in the same period a year ago, but some analysts said estimates of Dh90m in net profit for the third quarter may be aggressive.
"I think it is unfair to forecast earnings in line with the second quarter," said Majed Azzam, a property analyst at HC Securities and Investment. The third quarter is typically a slower month for construction companies as contractors book less work in the summer months, Mr Azzam said.
"Naturally you would see a dip in profits," he said, adding that he forecast Dh35m in net profit, 60 per cent less than analysts' general consensus.
While a reversal in provisions in the second quarter pushed earnings higher, Mr Azzam does not expect a repeat this time.
"The market doesn't seem to be pricing this in and that is why we're seeing a weakness," he said.
But the company's longer-term prospects could be looking up as it revealed on Wednesday it was going ahead with a plan to build a tower in the centre of St Petersburg, Russia.
Arabtec won the bid to construct the building in April 2008 but the project has been mired in a dispute between the developer and opponents who believe it will spoil St Petersburg's skyline.
"There were some complaints and objections from the different parts of the community and that has been addressed," the company's chief financial officer Ziad Makhzoumi told Bloomberg.
The Dh10m contract is to build what could become Europe's tallest tower.
Arabtec has also tendered for work in Turkmenistan, Azerbaijan and Angola as it seeks to diversify its portfolio away from the UAE's beleaguered property sector.
