Drake & Scull International PJSC (DSI), a regional market leader in integrated design, engineering and construction disciplines of Civil Contracting, Mechanical, Electrical and Plumbing (MEP), Water and Power, Rail and Oil & Gas reported total revenues of AED 1.494 billion and Net profits of AED 75 million for the first half of 2012 representing a top line growth of 8.3 % and a bottom line contraction of 29 % in comparison to the first half of 2011.
Year to date DSI secured contracts worth AED 1.6 billion which will guarantee a steady revenue stream for the company in the second half of the year. The company managed to sustain its order Backlog at AED 7.4 billion recorded as of the 30th of June 2012.
For Q2 2012 the company recorded a net profit of AED 32 million and AED 717 million in revenues. The quarterly figures indicate a 3 % decline in revenues and 42 % drop in net Earnings compared to Q2 2011. Earnings per share ("EPS") were AED 0.012 compared with AED 0.024 recorded during the same period last year.
Project awards for the Quarter reached AED 646 million secured in Abu Dhabi, Dubai and Oman.
Commenting on the results Osama Hamdan, CFO of DSI said, “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. Lower productivity on major projects and especially in KSA 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.”
The MEP business will continue to be the main driver of our net margin growth while gross margins are expected to improve after all directs expenses related to the establishment of news offices in Iraq, India and Algeria are completely rendered and incurred.
The company continues successfully in reducing its receivables through improved collections during the quarter. Contract provisioning is also expected to be extended to the second half of the year which is normal due the cyclical nature of the construction business in the region. However, the productivity on major projects across the region is expected to improve,” Hamdan Concluded.
The results of the first half of the year and the revenue growth in comparison to the first half of 2011 indicates that the company is well on track in achieving its growth objectives for the year. Expansion into Rail and Oil & Gas is underway and both business units are expected to join the revenue stream of the company in the second half of the year.