Drake & Scull International said net profit for the second quarter fell by almost half, although the company won billions of dirhams of construction contracts this year.
Drake & Scull profit cut almost in half
Drake & Scull International (DSI) said net profit for the second quarter fell by almost half from the same period last year, although the company won billions of dirhams of construction contracts this year. The company posted net profit of Dh44.5 million (US$12.2m) in the second quarter, a decline of almost 49 per cent from the same period last year.
DSI won Dh2.6 billion worth of projects in the first half of the year compared with Dh1.5bn in the same period last year. "The industry has faced challenging times over the last year and we have witnessed changing market dynamics," said Khaldoun Tabari, the chief executive of DSI. "Despite this, we are pleased that we have managed to increase our backlog and successfully maintained revenue growth and profitability in the second quarter over the first quarter of 2010."
DSI planned to acquire two Saudi Arabian companies during the second half of the year, which would "contribute to generating greater revenue in the near future", Mr Tabari said. He said in June that DSI would spend Dh700m on the two companies - a mechanical, engineering and plumbing business, and a civil works firm. The acquisitions will be 50 per cent funded by companycash, with the remainder borrowed from banks, Mr Tabari said at the time.
DSI is also seeking a partner in India as it moves to capitalise on growth in that country. DSI's contracts are worth a total of Dh4.8bn and the company expects its order book to show Dh6bn worth of contracts by the end of the year. Some of its recent wins include four contracts, in Kuwait, Oman and Qatar, worth a combined Dh80m. "DSI has maintained its margins, improved its revenues and bettered its collections in quarter two, and our momentum of winning projects has also improved since the beginning of the year," said Osama Hamdan, DSI's chief financial officer.