Dubai-listed Drake & Scull Q1 profits sink, Arabtec narrows loss
Dubai-listed contractor Drake & Scull (DSI) posted a 66 per cent fall in first-quarter net profit on Sunday (May 15), as a slowdown continues to grip the construction sector in the region.
The company reported a net profit of AED9.52 million in the three months to March 31as compared to a net profit of AED27.85m made in the same period in 2015, it said in a statement.
DSI’s revenue during the period under review was AED1.03 billion, down 7.2 per cent from AED1.11bn a year earlier.
The contractor had made losses in seven of the preceding eight quarters.
During Q4 of the last year, it posted net profit of AED14.7m, a jump from AED3.8m in the corresponding period in 2014. However, the company made a net loss of AED936.7m for the full-year 2015, compared with a net profit of AED100.7m reported for the previous year.
DSI’s total backlog stood at AED11.3bn, as compared to AED13.8bn reported during the same period in 2015, the company said.
Khaldoun Tabari, CEO and Vice-Chairman of Drake & Scull International, said he was “pleased to start 2016 on a positive note by returning to profitability in the first quarter of the year”. However, Tabari said he remains “cautious about the economic prospects of the region in the short and midterm”.
On the same day, Arabtec Holding, another major construction group listed on Dubai Financial Market, reported its sixth straight quarterly loss.
The construction firm made a net loss of AED46.4m during the first three months of 2016, which is, however, was way down from a loss of AED279.8m in the same period last year.
Arabtec’s quarterly revenue was AED1.94bn, up from AED1.79bn a year earlier.
In April, Mohamed Al Rumaithi, Chairman of Arabtec, which made a net loss of AED2.35bn in 2015, said that his company could break even this year and could make a profit the next year.
“2015 was a severe year, 2016 is still tough. I am confident of 2017, that’s when I see (profit),” said Al Rumaithi at the time.
He had added that the company was considering options to cut costs, including through job cuts, to counter difficult market conditions.
Drake & Scull shares fell 2.7 per cent and Arabtec slid 2.0 per cent in response to the results.