Drake & Scull Q2 Net Profit Drops 42%

UAE contractor Drake & Scull International (DSI) made a net profit of Dhs32 million in the second quarter of the year, a 42 per cent drop compared to Dhs55 million in Q2 2011, it said in a statement.

The company, which specialises in civil contracting, mechanical, electrical and plumbing (MEP) projects, announced that revenue during the quarter dropped three per cent to Dhs717 million. Project awards for the quarter reached Dhs646 million.

“Lower productivity on major projects, especially in KSA contributed to the decrease in revenues in Q2,” Osama Hamdan, CFO of DSI said in the statement.

“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.

“The focus in the second half will be to improve profitability and achieve higher earnings,” he added.

For the first half of the year, DSI reported a net profit of Dhs75 million, down over 22 per cent compared to Dhs97.15 million in the same period a year ago. Revenue reached Dhs1.49 billion, and year to date, DSI secured contracts worth Dhs1.6 billion.

The company said that it is expanding into rail and oil & gas, and that both the business units are expected to join the revenue stream of the company in the second half of the year.