Dubai-based Drake & Scull International expects to post revenues of AED3bn ($81.6m) by the year end and will grow its business 20-25 percent next year as it expands further into Saudi Arabia and Libya, its chief corporate affairs officer has said.
The firm, which is ramping up its expansion outside of its home market, sees “tremendous” opportunity in Libya and expects to resume its business there early next year, chief corporate affairs officer Zeina Tabari said.
“We expect to close at around AED3bn based on if we say that we will make around AED800m [in the fourth quarter] - similar to what we did last quarter,” Tabari said on the sidelines on the Arabian Business Women's Forum.
“Based on a secure backlog, which is around AED7bn today, we expect that next year we’ll probably be growing around 20-25 percent compared to 2011.”
The Dubai-listed company, which saw its third quarter profits increase 76 percent, also expects to increase its profits in the fourth quarter, said Tabari.
“The growth has come from two things; first of all these acquisitions have started to generate revenue…the second thing is that we have managed to win AED3.6bn worth of work since the beginning of the year and these projects have started to generate revenue.
“We’ve seen….projects in Saudi Arabia starting to produce, hence we see the fourth quarter hopefully better than the third quarter,” she added.
Drake & Scull made a net profit of AED60m in the third quarter, compared with AED34m made in the prior-year period, beating analysts’ expectations.
Construction firms in the UAE were hit hard by the global economic downturn, which saw projects in the Gulf state dry up and demand fall. The total amount of construction projects canceled or delays in the UAE increased to $170bn in August, according to Citigroup.
In the wake of the economic crisis, many UAE-based construction firms have expanded their operations in a bid to fill the gap left by the collapse of Dubai’s housing bubble.
Drake & Scull, whose biggest market is Saudi Arabia, is expanding its operations outside of Dubai and is currently bidding for projects in Asia, the Middle East and North Africa. The firm, which set up a Libyan unit in 2009, said it expects to restart its operations in the country in January, said Tabari.
“We are going back to Libya as of January 1, 2012 - we’ve just got board approval to go back to Libya. There are tremendous opportunities for water and power as well as the civil and MEP and we hope to compete on those projects,” she said.
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