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Drake & Scull sees Q1 profit fall

May 12, 2014 Staff

Dubai-based Drake & Scull has witnessed a 27% drop in net profits during the first quarter of 2014 to $12.4mn (AED45.6mn), despite a 2% increase in revenues to $340.5mn (AED1.25bn).

The firm said that the contribution from its general contracting arm dropped in the quarter, dropping to 24.6% of profits, compared to 35.9% during the same period last year.

Its engineering arm generated 56.8% of profits, which was an 11% increase on last year, while its oil & gas division operating in southern Iraq contributed 18.5%.

In a statement, Drake & Scull said its backlog had increased by 35.8% to $3.32bn (AED12.2bn) after it landed $300mn (AED1.1bn) of new contracts during the quarter.

Drake & Scull's chief finance officer Mukhtar Safi said the slowdown in its general contracting business was "due to unforeseen delays in two major projects" in Saudi Arabia. However, he said he did not expect a recurrence of the issue and for an overall improvement in margins in 2014.


He added that the firm's main strategy for the year is "to strengthen our balance sheet and reduce costs to deliver on our growing backlog".

"We expect in 2014 accelerated growth in emerging markets and particularly across the oil & gas and rail sectors."

CEO Khaldoun Tabari said: "Despite the severe competition, the greater overall outlook is that 2014 is expected to bring in a significant increase in momentum with more market activity."


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Source: Construction Week (United Arab Emirates)

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