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Drake & Scull reports fall in profits

16 Aug 12 Drake & Scull International (DSI) has reported total revenues of AED1.494bn £259m) and net profits of AED75m (£13m) for the first half of 2012.

The figures represent a top line growth of 8.3% and a bottom line contraction of 29% in comparison to the first half of 2011.

In the year to date, DSI secured contracts worth AED1.6bn which it said will guarantee a steady revenue stream for the company in the second half of the year. The company managed to sustain its order backlog, which was AED7.4bn as of 30 June 2012.

For Q2 2012 the company recorded a net profit of AED32m and AED717m in revenues. The quarterly figures indicate a 3% decline in revenues and 42% drop in net earnings compared to Q2 2011.  

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Project awards for the quarter reached AED646m, with wins secured in Abu Dhabi, Dubai and Oman.

 “We have managed to report profits and higher revenue growth in the first half of the year despite challenging market conditions and in comparison to the first half of 2011,” said DSI CFO Osama Hamdan. “Lower productivity on major projects and especially in KSA [Saudi Arabia] contributed to the decrease in revenues in Q2. Finance cost from acquisition funding and contracts provisioning continue to hinder profit growth. Our exposure to the Euro currency through our German subsidiary and the volatile fluctuation in foreign exchange also contributed to the decline in earnings. Overall revenue growth for H1 indicates the improvement in operational efficiency, the focus in the second half will be to improve profitability and achieve higher earnings.”

Expansion into rail as well as oil and gas is under way and both business units are expected to join the revenue stream of the company in the second half of the year.

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