x Abu Dhabi, UAESunday 21 January 2018

Drake & Scull chief named director on Depa board

Khaldoun Tabari, the chief executive of Drake & Scull International, has been appointed as a director on the board of Depa, an interiors contractor.

Khaldoun Tabari, the chief executive of Drake & Scull International, has been appointed as a director on the board of Depa, the interiors contractor.

The disclosure was made yesterday in a filing on the Nasdaq Dubai, as Depa's biggest shareholder, Arabtec Holding, received representation on the board.

Arabtec's chief executive, Hasan Abdullah Ismaik, was appointed as director. Mohammed Al Fahim and Wassul Fakhoury, who both serve on Arabtec's board, were also appointed.

The appointment of representatives from both Arabtec and Drake & Scull on Depa's board has triggered speculation of further collaboration among Dubai's contracting companies.

Arabtec has over the years been associated with some of the most high-profile construction projects in the UAE, including Burj Khalifa, while Drake & Scull, focuses on mechanical, electrical and plumbing work.

This week's board reshuffle at Depa was reminiscent of similar changes made in the Arabtec boardroom to accommodate its major shareholder, Abu Dhabi's Aabar Investments, analysts say.

"The way Aabar took control of Arabtec was for the whole industry a new sign of how to do business in the UAE," said Fathi Ben Grira, the chief executive at Mena Corp in Abu Dhabi. "You don't need to read between the lines. When you have that kind of calibre on the board with all the potential synergies, you can't do otherwise than expect something to come out of that."

Shares of Depa were suspended following a decision made by the Dubai Financial Services Authority as the company prepared to make the changes that were agreed by shareholders at its annual general assembly meeting on Monday.

The shares fell 4.7 per cent yesterday to close at 40 cents on thin volumes. Just over 2,600 Depa shares changed hands.

"The move is not a clear indication due to the high spread between bid and offer and the low liquidity on the shares," said Tariq Qaqish, the head of asset management at Al Mal Capital, an investor in Depa.

With Aabar a major shareholder in Arabtec, and Arabtec a major shareholder in Depa, the interiors company is likely to benefit from upcoming projects due to take place in Abu Dhabi.

"With the new shareholders taking more control with the push of the emirate of Abu Dhabi, the whole business model will be more attractive because of high spending expected in the AD emirate," Mr Qaqish said.

"We will see backlogs increasing due to the Abu Dhabi plan and the company will enjoy a different status in the future," he added.

In a separate filing, Depa also provided its first-quarter results. Revenues reached Dh446 million, compared with Dh378m in the year previous. Contract margins rose to 13 per cent, compared with 11 per cent. Net profit before non-controlling interests stood at Dh12m, versus a loss of Dh9m in the year earlier. Order backlog stood at Dh3 billion by the end of March.