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Sun 13 Nov 2011 10:01 AM

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Drake & Scull Q3 net income climbs 76%

Dubai-based contracting firm expects a pickup in its backlog in the fourth quarter

Drake & Scull Q3 net income climbs 76%
Drake & Scull made a net profit of AED60m ($16.3m)in the third quarter

Drake & Scull International posted a 76 percent increase in third-quarter net profit on Sunday, beating analysts forecasts, and the contracting firm said it expects to maintain profit growth in the fourth quarter.

The Dubai-based company made a net profit of AED60m ($16.3m)in the third quarter, compared with AED34m made in the prior-year period, it said in a statement to the Dubai bourse.

Analyst polled by Reuters forecast a profit of AED48.5m for the third-quarter.

Revenue for the third quarter was AED847m, it said, up 96 percent from AED432m in the third quarter of 2010. Total projects awarded year-to-date totalled AED3.6bn.

Construction companies in the UAE, slowly recovering from a property market collapse where house prices fell more than 60 percent, are expected to see further pressure following fears of another global recession and the European debt crisis.

Credit Suisse cut its price target on Drake and Arabtec in September citing lower margin estimates and a slump in contract awards for the companies.

Drake, whose biggest market is Saudi Arabia, has been looking to rapidly expand its operations outside Dubai. The company is currently bidding for projects in both Asia and the Middle East and North Africa.

"We expect a pickup in our backlog in the fourth quarter as we anticipate new project announcements," chief financial officer Osama Hamdan said in the statement.

Dubai's largest developer Emaar Properties saw its profits drop by 34 percent, impacted by the emirate's weak property sector.

Drake's shares have fallen 21 percent year-to-date. 

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