DSI Q1 net profit declines on operational setbacks

The contractor on Thursday mentioned that it’s dealing with some major operational setbacks in Saudi Arabia, which will continue to have a far reaching effect on its performance in 2015.

By Abdul Basit – Chief Reporter

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Published: Fri 15 May 2015, 11:53 PM

Last updated: Fri 26 Jun 2015, 12:23 AM

Dubai — Drake & Scull International, or DSI, net profit dropped more than 39 per cent to Dh27.8 million for the first three months of the year compared to Dh45.65 million for the same period a year ago.

The contractor on Thursday mentioned that it’s dealing with some major operational setbacks in Saudi Arabia, which will continue to have a far reaching effect on its performance in 2015. The share price of the company went down more than 3 per cent to Dh0.8 on Thursday.

Saudi Arabia is the largest market for the company in terms of order backlog. The order backlog reached Dh13.8 billion representing a year on year increase of 13 per cent. KSA and the UAE are the largest contributors to the backlog accounting for 33 per cent and 21 per cent respectively as of the March 31, 2015.

“Despite the volatile market conditions and the liquidity crunch in our industry, we managed to remain profitable,” DSI chief executive officer and vice-chairman Khaldoun Tabari said in a statement.DSI revenues declined to Dh1.11 billion compared to Dh1.25 billion in March quarter last year. Saudi Arabia and the UAE are the top contributors in the company’s revenue and contribute 41 per cent and 25 per cent respectively.

The company declared Dh41.7 million operating profit for the first quarter of 2015. Tabari said: “Drake & Scull International is dedicated to achieving sustainable growth and to empowering the fundamentals of our high margin businesses in 2015. In the first quarter of FY 2015, our engineering business secured the prestigious Dh198 million Jewel of the Creek development in Dubai, while our general contracting business was awarded the Dh180 million Reef Residences project win.”

He added: “Our results in Q1 2015 largely reflect the sense of cautious progress in our regional industry. The recent spate of project announcements from the major markets of the region i.e. KSA, UAE and Qatar in the residential, hospitality and rail sectors has infused the industry with a lot of confidence to push ahead with the vital infrastructure development needed to cater to the growing regional population.”

  — abdulbasit@khaleejtimes.com



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