Dubai’s Drake & Scull reports lower profits, H1 revenues edge up
Operating profit for the first half was $15.8 million, down 27% compared to the same period in 2014
The Dubai-listed contractor Drake & Scull International (DSI) has reported total revenues of $650.7 million (AED2.39bn) and a net profit of $9.25 million (AED34m) for the first half of 2015.
The company achieved a 2% year-on-year growth in revenue, it said in a statement, with its best performing markets being Saudi Arabia, the UAE and Qatar.
Over a third of the consolidated group revenue (37%) was generated in Saudi Arabia, which remained the strongest market in the first half. Operations in the UAE also picked up pace and contributed 28% of the group revenue, up 7% from last year. The firm’s operations in Qatar also improved, contributing 16% of the group revenue for the period.
DSI’s operating profit for H1 2015 was $15.8 million (AED58m), down by 27% compared to the same period in 2014. The decline in operating margins is due to delays and cost overruns on projects across several markets, the firm said. Its second-quarter profit was down by 60%, according to Reuters calculations.
Meanwhile, total new project awards for the first half of the year reached $386.6 million (AED 1.42bn) taking the group’s backlog value to $3.6 billion (AED13.24bn) as of June 30, 2015.
“We have met our top line target for the first half of the year; however, we continue to face pressure on our margins as a result of the delays on several projects,” said Khaldoun Tabari, CEO and vice-chairman of DSI.
“Despite the bearish business sentiment across the sector, we’ve started Q3 2015 on a positive note with AED305 million ($83.05m) worth of new projects in Kuwait, and we remain focused on improving our operation efficiency and increased focus on collections across all markets.”
