Font Size

- Aa +

Mon 8 Nov 2010 10:41 AM

Font Size

- Aa +

DSI sees 45% plunge in Q3 net profit

Drake & Scull reports AED34.1m in net profit for the period, claims AED4.7bn order backlog

DSI sees 45% plunge in Q3 net profit
The quarterly results reflect DSIs rapid expansion, said CEO Khaldoun Tabari

Dubai-based contractor Drake & Scull International (DSI)
on Sunday reported a 45 percent fall in net profit for the third quarter,
despite new contracts wins and a diversified order book.

DSI reported AED34.1m in net profit for the three months to
September 30, 2010, down from AED62.3m in the same period a year earlier.

Net profit for the nine month period up to 30th September
fell by a similar percentage, down to AED120m from AED214m, the company said in
a statement to the Dubai bourse.

Contract income for the third quarter rose eight percent to
AED432m, partly due to contract wins from previous quarters filtering through
to the balance sheet.

Civil contracting projects comprised 25 percent of revenue
in the third quarter, the Dubai-listed company said.

The contractor has pursued an aggressive expansion strategy
in the wake of the collapse on the Dubai construction market, establishing new offices in Egypt, Syria,
Oman and Saudi Arabia.

DSI said it had won contracts worth AED2.8bn since the
start of the year.

“The results this quarter reflect the measure and the
outcome of our expansion and we remain optimistic about the future outlook of
the company,” said Khaldoun Tabari, CEO, in an emailed statement.   

“The company’s current backlog stands at AED 4.7bn and we
anticipate AED1bn worth of new projects till the end of the year as a result of
our aggressive expansion plans. It is likely that Abu Dhabi and Saudi Arabia
will generate the majority of these.”

Commenting on the Q3 results, chief financial officer Osama
Hamdan said: “Delay in execution of newly awarded projects affected our profit
stream especially when our overheads and preconstruction expenses are
continually incurred.”

DSI last month finalised the acquisition of an unnamed Saudi Arabian mechanical,
electrical and plumbing company in a transaction worth AED243m.

The Saudi firm’s order backlog currently stands at AED796m,
DSI said.

For all the latest construction news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.