x Abu Dhabi, UAEThursday 23 November 2017

Drake & Scull losses deepen as restructuring continues

Contractor confident of improved performance in 2018

DSI losses deepened during the third quarter. Rich-Joseph Facun / The National
DSI losses deepened during the third quarter. Rich-Joseph Facun / The National

Drake & Scull International (DSI), the under-pressure Dubai-based contractor posted, deeper losses for the third quarter, which it blamed on a lack of liquidity ahead of the completion of its recapitalisation programme.

The company posted a loss of Dh318 million for the three months to the end of September, compared with a loss of Dh78m for the same period a year ago, and a Dh182.7 loss for the second quarter of 2017.

The third quarter loss came in well below the Dh119m loss prediction calculated by Bloomberg from an average of analyst forecasts.

Contract revenue declined by a third year-on-year to Dh590m, while general and administrative costs almost doubled to Dh114m.

DSI launched a recapitalisation programme earlier this year in the face of mounting accumulated losses, with Dubai-based investor Tabarak Investment becoming the company’s largest shareholder with an investment of Dh500m.

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The company said on Wednesday it expected its debt restructuring to be completed before the end of the year.

“The lack of liquidity prior to the completion of the Recapitalization Program and to the Equity injection by Tabarak Investment impacted the overall productivity of ongoing projects,” DSI said in a statement on the Dubai stock exchange.

“The ongoing projects portfolio in the UAE remains robust and continues to be the main revenue driver, with the debt restructuring positively progressing in the local market.”

Rabih Abou Diwan, DSI’s investor relations director, said it expected the company’s financial performance to normalise in 2018.