x Abu Dhabi, UAEMonday 22 January 2018

Drake & Scull profits soar on back of Saudi Arabia projects

Profits at Drake & Scull International's profits rose 63 per cent year on year to Dh52.2 million during the three months to June.

Profits at Drake & Scull International rose 63 per cent year on year to Dh52.2 million during the three months to June as the Dubai-based contractor benefited from a revival in construction markets in Saudi Arabia and the UAE.

In a statement posted to the Dubai bourse yesterday, Drake & Scull reported that contract revenue during the period nearly doubled to Dh1.340 billion in the second quarter from Dh717.3 million in the same period a year earlier.

The company's backlog of orders reached a record high of Dh11.7bn in June - an increase of 58.1 per cent compared with a year ago.

In April Drake & Scull, which specialises in mechanical, electrical and plumbing work, announced it had been awarded three contracts worth a total of Dh663m to build three government complexes in the UAE and Saudi Arabia in April and in May it was awarded a 1.725 billion Saudi riyals (Dh1.689bn) contract to build one of the tallest towers in Saudi Arabia.

"We are well on track in achieving our growth objectives for the year," said Khaldoun Tabari, the Drake & Scull chief executive. "The kingdom of Saudi Arabia and the UAE continue to be the key drivers to our top-line growth."

"We remain optimistic on the prospects of the second half of the year across all our markets and we expect to continue with the same momentum with additional emphasis on improving liquidity and sustaining profitability," he added.

Drake & Scull has also over the past six months benefited from its closer working relationship with Dubai's largest contractor, Arabtec, which is 21 per cent owned by the Abu Dhabi investment fund Aabar.

The company was part of a consortium with Arabtec that won a US$629m contract to build a tourist project in Jordan in June. Last month it announced that Arabtec as lead contractor had awarded it a Dh233m sub contract to provide plumbing and electrical works at Abu Dhabi's new Fairmont hotel.

Shares in Drake & Scull have risen 67.6 per cent since the start of the year, partly on speculation that the Arabtec could stage a takeover bid.

Meanwhile Arabtec said yesterday that it had appointed former Tourism Development and Investment Company chief development officer Nabil Al Kendi as chief operating officer for the GCC region.

In a statement yesterday, Arabtec said that Mr Al Kendi would be responsible for "leading Arabtec's existing subsidiary companies with focus on the company's operational growth and new ventures".

The Arabtec managing director and chief executive, Hasan Abdullah Ismaik, said: "As our construction activities expand both locally and regionally, it is imperative to have the right leadership that complements our ambitious vision.

"Arabtec believes in empowering local talent and we are consistently seeking UAE nationals with leadership potential to nurture them and develop their capabilities as future industry leaders."