Contractor made a net profit of just $2.67 million in the three months to March 31, 2016
Drake and Scull International (DSI), the Dubai-based contractor, has posted a 61% fall in first-quarter net profit, with declining revenues extending an earnings slump, its latest financials show.
The contractor made a net profit attributable to shareholders of AED9.8 million ($2.67m) in the three months to March 31, 2016, it said in a statement. This compares to a net profit of $6.83 million in the year-earlier period.
According to a Reuters report, EFG Hermes forecast that DSI would make a quarterly net profit of $5.47 million.
In seven of the eight previous quarters, the Dubai Financial Market-listed DSI had reported worsening earnings. The contractor blamed the slump on a slowdown in the Gulf construction sector. This included a loss in the third quarter of 2015 due to provisioning.
DSI’s first quarter revenue was $280.4 million, down 7.2% from the $302.2 million posted a year earlier.
Meanwhile, costs shrank by a smaller margin, falling 5.1% to $260.3 million.
Earlier this year, the contractor appointed Wael Allan as chief operating officer as part of a shakeup of senior management. Kailash Sadangi was also appointed as chief financial officer.
“The appointments reflect DSI’s strategic initiatives and operational focus in light of the challenging market conditions across the region,” DSI said in a statement at the time.
“The new management structure is expected to enhance DSI’s efforts to continue its fiscal consolidation, operating discipline and costs rationalisation drive while pursuing high margin, low risk growth in key markets across MENA.”