Dubai's Drake Q2 net profit nearly halves

Dubai’s Drake Q2 net profit nearly halves

Revenue for the period at 411 mln dirhams.

August 12, 2010 1:30 by Reuters

Dubai contractor Drake & Scull International’s second-quarter net profit nearly halved, shy of analysts forecasts, as market conditions remained tough.

The company made a net profit of 44.5 million dirhams ($12.12 million) in the three months to June 30, it said in a statement on Thursday, a drop of almost 49 percent on the year-ago period.

Revenue stood at 411 million dirhams, it said.

Second-quarter net profit in 2009 was 86.6 million dirhams.

Four analysts polled by Reuters in July forecast an average net profit of 51.8 million dirhams for the quarter.

“The industry has faced challenging times over the last year and we have witnessed changing market dynamics,” Chief Executive Khaldoun Tabari said in the statement, adding the company’s performance improved when compared to the first quarter of 2010.

The company said its project wins so far in 2010 stood at 2.6 billion dirhams, compared to 1.5 billion dirhams for the same period last year, while its backlog reached 4.8 billion dirhams.

The planned acquisitions of two Saudi firms “will contribute to generating greater revenue in the near future”, he added.

The firm said it aims to increase its order pipeline by a third by year’s end to around 6 billion dirhams after it buys the two firms this year, its chief executive said in May.

Drake — which specialises in mechanical, engineering and plumbing (MEP) businesses and listed on the Dubai bourse in March 2009 — has been rapidly expanding its operations outside Dubai, where house prices plunged some 60 percent since their peaks in 2008 as a result of the financial crisis.

Drake’s shares closed 0.7 percent lower at 0.8 dirhams a share in earlier trading on Thursday, in line with Dubai’s bourse which also declined 0.7 percent.

Drake’s projects include luxury hotels such as the Shangri-La Qaryat Al Beri in Abu Dhabi.

(Reporting by Tamara Walid; Editing by Jason Benham)