Drake & Scull International revenue climbs in H1

Khaldoun Tabari,

Drake & Scull International, or DSI, on Wednesday said its 2015 first-half revenue rose 1.7 per cent to Dh2.39 billion as its business picked up momentum in the UAE and Saudi Arabia.
In a statement, the Dubai Financial Market-listed firm said its net profit during January-June period amounted to Dh34 million as total new project awards reached at Dh1.42 billion. The group's total backlog value stood firm at Dh13.24 billion as of June 30.
The company further said revenue from the engineering business rose 11 per cent and contributed 60 per cent of the group revenue. The general contracting business contributed 35 per cent of the group revenue, down by eight per cent as compared to the same period last year.
The regional market leader in the integrated design, engineering and construction disciplines said its first-half operating profit fell 27 per cent to Dh58 million from Dh79 million in the same period last year. It attributed the decline in operating margins to delays and cost overruns on projects across several markets. The contracting firm said its second-quarter revenue climbed 16.36 per cent to Dh1.28 billion compared to Dh1.1 billion in similar quarter last year. However, the net profit during April-June quarter amounted to Dh6 million while operating profit reached at Dh16 million.
"We have met our top line target for the first half of the year; however, we continue to face pressure on our margins as a result of the delays on several projects," said Khaldoun Tabari, chief executive and vice-chairman of DSI. The engineering business remained main revenue driver for the company as it constituted 87 per cent of the new project awards in first half while contracting contributed the remaining 13 per cent. The UAE comprised the largest share of the new awards accounting for 75 per cent of the group awards and Oman comprised 25 per cent in January-June 2015 period.
The majority of the new awards were secured in the hospitality sector which accounted for 58 per cent of the group awards while the commercial and residential sectors stood at 24 per cent and 18 per cent, respectively. "Despite the bearish business sentiment across the sector, we've started third quartet on a positive note with Dh305 million worth of new projects in Kuwait. We remain focused on improving our operation efficiency and increased focus on collections across all markets," Tabari said.
DSI, which established its first office in Abu Dhabi in 1966, has expanded its operations to Kuwait, Oman, Saudi Arabia and Qatar in Gulf region. It also established its presence in Egypt, Jordan, Algeria, Iraq, India, Thailand, as well as managing projects in Europe and other parts of North Africa.
As per latest data, about 37 per cent of the consolidated group revenue was generated in Saudi Arabia which remains the largest market for the company in 2015.
Operations in the UAE also picked up momentum and contributed 28 per cent of the group revenue; up by seven per cent as compared to the same period in 2014. Operations in Qatar improved and contributed 16 per cent of the group revenue for the period, up by eight per cent compared to last year.
- muzaffarrizvi@khaleejtimes.com