By Andy Sambidge
Burj Khalifa interior contractor says has 'strong pipeline' of GCC, South East Asia projects
Depa Ltd, the interior contractor that fitted out Dubai's Burj Khalifa, the world’s tallest tower, said on Sunday it expected to report revenue improvements across its business sectors for the third quarter.
The company, which posted a net loss of AED110m ($29.9m) in the first half of the year, said in a trading statement that its underlying business "continues to perform in line with expectations, with all major projects making good progress".
"The company continues to have a backlog of projects at near record levels and has a very strong pipeline of future projects, especially in the GCC and South East Asia, which will be signed into the backlog in the coming months, Depa said in the statement.
It added that results for the third quarter, which will be officially announced later this month, were "expected to see continued revenue improvement across all business lines".
It said revenues in hotels, infrastructure, retail and yachts contracting projects were expected to be "particularly strong".
The statement said: "The bottom line, whilst expected to be up on the comparative period in 2011 will, however, reflect the seasonally weak contribution at this time of year, as well as the tougher competitive pricing environment."
It added that results for the nine months to September 30 would also see a "good revenue improvement" but profits will continue to be impacted by three specific contract issues, which will have been closed out by the year end.
Mohannad Sweid, chief executive, Depa, said: "We are seeing an encouraging increase in new business prospects across our core geographies and sectors.
"Developers have started to bring more projects on stream and our segment of the industry, which typically lags the main contractors, is now starting to recover.
"This together with higher quality projects being signed into the backlog will start to alleviate the squeeze on margins in 2013. We are increasingly well positioned for future years and this can only help increase shareholder confidence and help rerate our shares which sit at all-time lows and at an unjustified 30% of book value."
Depa in September posted losses for the first half of 2012 following problems on three projects.
The project issues, which included the cancellation of a contract to work on the New Doha International Airport, led to a net loss of AED110m ($29.9m) compared to a profit of AED48m in the year-earlier period.
Despite the problems, Depa said it posted a 10 percent rise in revenues in the first half of 2012, reaching AED825m.
The company added that without the impact of the problem projects, the business would have recorded a net profit of AED11m in H1.
SInce 2008 the Depa company' revenue has declined constantly, the more jobs they got and the more money they lost, what is the point that they get more backlog of projects!
Depa went for IPO in 2005, the share was trading at 1.35USD,but today they are trading at 0.25 USD! No surprise to me, it is because bad management! The investors do not want to listen to what they are talking, the investors just want to see the profit!, the return on this stock is -80 percent over past seven years, this is really long term investment, but the result is very impressive!