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Depa posts Dh110 million loss in H1

Depa Limited, the interior-contracting firm which fitted out Burj Khalifa, on Sunday announced that its first-half revenues for 2012 climbed 10 per cent to Dh825 million from Dh749 million in the same period last year.

The Dubai-based company posted Dh110 million loss in January-June period due to some issues involved in three specific projects including the termination of the Lindner Depa joint venture contract for the New Doha International Airport. It had recorded Dh48 million net profit in the first half of 2011.

“Excluding the impact of three projects, the business would have recorded a net profit of Dh11 million in first half of 2012,” the company said in a statement.

The company said its backlog rose 17 per cent to Dh2.7 billion from Dh2.3 billion in the same period last year. “Backlog is increasingly diversified as compared to prior years — GCC down to 41 per cent, Asia up to 34 per cent and Africa up to 18 per cent,” the statement said, adding that over Dh940 million of new contracts signed in first half of 2012 and 200 projects currently being executed.

Depa has continued to diversify its backlog reducing its dependence on UAE projects. The UAE has reduced from 21 per cent to 15 per cent of the company’s backlog with Asia and Africa increasing; together representing 48 per cent up from 37 per cent in first half of 2011.

Design Studio, Depa’s Singapore-listed operations, continues to perform well with a strong balance sheet and healthy order book of Dh711 million as of August 13, 2012. Design Studio continues to build its presence in China and believes it will remain a key growth driver for the Group in the next few years, the company said

“Wins include two hospitals in Morocco and Qatar; two hotels in UAE and Angola,” it explained and said infrastructure sector growth remained strong, up 11 per cent in value to Dh570 million in contrast to Dh514 million in similar first-half period last year.

“Revenues have increased in first-half year on year and all our regional subsidiaries have experienced uplifts in revenue. We have signed over Dh940 million in new contracts over the last six months and we continue to have a strong backlog of projects on which we are working,” Mohannad Sweid, chief executive of Depa, said.

“Whilst specific contract issues have impacted these results; longer term, severe price competition and a reduction in client budgets as a result of the continuing global economic slow-down will have a direct impact on our margins and profits in 2012 and 2013. We believe difficulties are largely industry and macro economic related and expect to come out stronger and better positioned in future years.”

The company’s total assets, as at June 30, 2012, declined to Dh2.95 billion from Dh3.03 billion at December 31, 2011. Total liabilities increased from Dh1.29 billion to Dh1.3 billion.

“Depa continues to expect difficulties in its operations across the globe, particularly in the coming 12 months. The company believes that these setbacks and difficulties are largely industry and macro-economic-related and is working through them and leveraging its strengths to improve the company during these difficult times to come out stronger and better positioned in future years,” the statement concluded.

muzaffarrizvi@khaleejtimes.com