Net profit for the nine months to September 30 fell 72%, company said
Dubai-based Depa says nine month net profit plunged 72%
Depa, the interiors firm that fitted out Burj Khalifa, reported a 72 per cent decline in net profit in the first nine months of 2018, held back by weaker performance of its Design Studio Group division.
Net profit after non-controlling interests stood at Dh36.2 million for the nine months to September 30, Depa said in a statement to Nasdaq Dubai, where its shares are traded. The first nine months of 2017 included “the positive impact of the resolution of two major long-outstanding receivables”, the company added.
Revenue was up 5 per cent to Dh1.3 billion over the period, and Depa had a backlog of work valued at Dh2bn – up 15 per cent annually in the year to date. The forthcoming pipeline includes multiple projects connected to Expo 2020.
“The group as a whole continued its positive momentum, while DSG’s performance lagged behind the other key business units,” the company said.
A three-year slump in oil prices has weighed on GCC contracting firms, which have struggled to maintain growth amid weaker economic conditions. However, higher oil prices this year are prompting an uptick in building activity, which is boosting contractors' performance.
DSG’s performance was affected by cost overruns from delays on a Dubai-based project and provision for costs relating to its plans to restructure its Malaysian manufacturing facilities, Depa’s statement added. The restructuring is expected to achieve higher operational use and cost savings.
Vedder, another Depa division, secured its largest project to date during the nine-month period, worth more than Dh130m, and secured fit-out of three new-build superyachts.
Another business unit, Deco Group, delivered the Dolce & Gabbana, Valentino, Bottega Venetta and Dior boutiques in the Dubai Mall extension project, over the period, and two other boutiques are set to be delivered before the end of 2018.
“The group has made considerable progress during the first nine months of this year with some significant project wins building its backlog,” said Hamish Tyrwhitt, group chief executive of Depa.
“The group continues to focus on winning projects capable of generating cash-backed profits in our core addressable markets and maximising long-term sustainable shareholder value.”