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Depa Sees Flat Growth

DUBAI - Dubai-based leading interior contracting company Depa Ltd on Wednesday declared a 23 per cent jump in its year-on-year net profit for 2009, but forecast flat growth for the current year.

The interior contractor reported Dh240 million net profit for 2009 compared to Dh194.5 million it earned in 2008 while its net revenues up by 36 per cent to Dh2.7 billion last year from Dh2 billion in 2008.

The company, which has Dh2.1 billion in contracted backlog as on December 31, 2009, said the company has seen strong growth in revenues and profits, in line with expectations and in the face of a challenging economic environment.

“Despite the difficulties brought about by a once in a generation downturn, Depa’s revenues …. verifies our diversification and growth strategies. As the company enters 2010, we look forward to another year of strong revenues and earnings, albeit with flat growth when compared with 2009, Depa chief executive officer Mohannad Sweid said.

Depa said it continues to pursue its long-term strategy of vertical and horizontal integration and will continue to acquire and invest in companies strategically related to its own.

Recently, and after the year end, Depa acquired Carrara Mid East Industrial Company, one of the region’s first, and the market’s leading producer and installer of high quality stone. Depa will also continue to set up joint ventures with reputable partners within its markets where opportunities present themselves.

“As a business, we continue to diversify our operations, by geography and sector, and actively pursue horizontal and vertical acquisitions,” Sweid said.

Depa has continued an active geographic diversification strategy to reduce reliance on any one market – only 55.2 per cent of Depa’s 2009 backlog comprised of UAE projects. The company also increased its presence in high growth markets, such as Abu Dhabi and Saudi Arabia, and grew its South East Asian operations.

The interior designer has executed large and complex projects in over 16 countries. Its major projects in the UAE include the Burj Al Arab Hotel, Emirates Palace, Dubai Metro and Italian fashion brand Armani’s first hotel in the world located in the world’s tallest tower 
Burj Khalifa.

The Nasdaq Dubai listed interior designer believes that the hospitality sector will continue to be a significant portion of revenues as refurbishment work begins to play a role in the industry, and as high-end, new-build projects continue to develop. However, the company also expects infrastructure to become an increasingly important portion of its revenues as government projects near completion.

Depa stocks rose by 3 per cent to 72 cents on Wednesday with trading volume of 414,818 shares. The stock has climbed around 34 per cent this year, giving the company a market capitalisation of $445 million. 


abdulbasit@khaleejtimes.com