Dubai's Drake & Scull Q1 net profit falls 61 per cent

Dubai-based contractor Drake & Scull International (DSI) reported a 61 per cent year-on-year decline in net profit for the first quarter of 2016.

It reported a net profit attributable to shareholders for the period of Dh9.8 million, compared to Dh25.1m a year earlier.

Revenue was also 8 per cent lower at Dh1.03 billion, and the value of its backlog has also declined by 18 per cent to Dh11.3bn (Q1 2015: Dh13.8bn).

Despite the results, the company argued that it had made progress with a strategy embarked upon last year to cut costs, improve margins and to try to boost its working capital.

“The effect of strategic decisions and unprecedented measures initiated by DSI’s management last year have started to materialise, and have aided our determined efforts to continue the refinement and consolidation of our business in key markets,” said the company’s chief executive Khaldoun Tabari.

“We expect to continue making changes that will create positive impacts on the bottom line in the next couple of quarters. I believe that adapting our business model to the current market challenges is key to the success of our business.”

He said the company would continue to focus on efficient working capital and on boosting its liquidity, and highlighted the recent appointments of former Arcadis Middle East CEO Wael Allan and Al Khodari chief financial officer Kailash Sadangi as evidence of a strengthened operational base.

“Our proactive strategic initiatives and revamped management structure in light of the new reality in our regional industry have helped us to absorb the impact of the overall slowdown in the regional industry, and we hope to sustain our performance by securing more high margin projects while improving our bottom line growth for the rest of the year,” said Mr Tabari.

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