The company plans to press on with a comprehensive restructuring plan
Drake & Scull appoints second CEO as it narrows Q2 loss
Drake & Scull International appointed its second chief executive this year as the company, which narrowed its loss in the second quarter, presses on with restructure of operations.
The Dubai-listed engineering and construction services company appointed Yousef Al Mulla as chief executive starting August 26, replacing Fadi Feghali, DSI said on Tuesday in a statement to the Dubai Financial Market, where its shares are traded.
DSI reported a net loss attributable to shareholders of Dh181 million for the three months ending June 30 compared with a loss of Dh183m in the same period a year earlier, according to the regulatory filing with the bourse on Tuesday.
Contract revenue nearly halved to Dh350m in the second quarter from Dh660m in the same period a year earlier.
The company said the decline in profitability is mainly attributed to cost overruns recorded for non- performing subsidiaries in secondary markets, primarily in Oman, Qatar, and Jordan. A hike in finance costs also contributed to the quarterly loss.
DSI said its board of directors discussed a "detailed and comprehensive" plan that is being prepared as a continuation to the restructuring strategy of its business that was put in place 2016-2017. The firm intends to scale down operations in none core businesses and non-performing business streams in the next phase of its restructuring while increasing its focus on core markets and profitable business streams.
In a separate filing with the DFM, DSI said there are no plans for it to suspend its shares from trading and that the decline in the company's share price is a reflection of supply and demand in the market.
In March, the company said it would appoint Mr Feghali as chief executive, a post that had been vacant since August. Mr Feghali assumed his role on April 1.
Mr Feghali, who previously managed the international business units of DSI, succeeded Wael Allan, whose tenure ended in August last year by the board amid a management shake-up. Mr Allan had assumed the post in October of 2016 after the long-standing chief executive Khaldoun Tabari stepped down.
DSI's main business lines include engineering, construction, and oil and gas.