CFO says that Q3 results reflect overall slowdown in regional construction sector
Drake and Scull International, the regional provider of civil contracting, MEP, water and power and rail engineering and construction services, has announced total revenues of $571.7mn for the first nine months of 2012.
Net profit was recorded at $22.5mn for the same period, the company said. The order backlog closed at $2.04bn as for September 2012, with total project awards year to date reached $735mn.
However, in the context of the seasonal trend and the associated slowdown in productivity across the contractor’s major market, revenues earned in Q3 were $169.6mn, with profits amounting to $2.17mn.
“The Q3 results reflect an overall slowdown in the construction sector in the region. Productivity rates dropped across all our projects in the GCC and Africa. The procurement cycle in our operations dipped as a result of the summer holiday season, thereby impacting the overall profitability,” said Osama Hamdan, chief financial officer of DSI.
“The company also extended its contract provisioning in the third quarter,” he added.
The cumulative revenues for the first nine months of 2012 indicate a continued momentum, Hamdan said. He added that the backlog had been positively enhanced by recent project awards.
The company has been able to record strong project awards across all sectors year to date, which indicates sustainable growth and sound fundamentals.
“The solid performance of our core MEP business has been strong, with over 10% net margins and will continue to contribute to the growth of DSI. The Oil & Gas and Civil businesses are expected to enhance revenue growth during the last quarter. Expansion into Rail is on track and the company is prequalifying for major bids in that sector, across the region,” Hamdan explained.