DSI profits up 76% for first nine months of 2013

Contractor takes home $39.5m net profits from total revenue of $969.2m

Khaldoun Tabari, Drake & Scull International CEO.
Khaldoun Tabari, Drake & Scull International CEO.

Dubai-based contractor Drake and Scull International (DSI) has announced a 76% increase in net profits to $39.5m (AED 145m) for the nine months to September 30.

DSI’s results were boosted by a strong performance in the third quarter which saw it take home $8.2m (AED 30m) compared to the previous year’s $2.1m (AED 7.9m).

The increase in net profits in the first nine months of the year was fed by a surge in revenues which reached $969.2m (AED 3.56bn) – up 68% from last year’s figure of $577.1m (AED 2.12bn).

DSI has also made advances in its operational efficiency with Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) reaching $58.8m (AED 216m) compared to $27.2m (AED 100m) achieved during the same three-quarter period in 2012.

As a result of the company’s improved performance, earnings per share rose from AED 0.030 to AED 0.054.

Commenting on the results, Khaldoun Tabari, CEO of DSI said: “Over the past nine months we have seen our revenues grow progressively with sustained gross and net margins across all our markets. For the first time in our history we have achieved AED 3.56 billion in revenues and AED 12.4 billion in Backlog. We have also managed to sustain positive momentum in our project wins which stands at an all-time high of AED 6.74 billion year to date. We remain confident of closing the year with a strong quarter with significant contribution from our operations in KSA, Jordan, and Algeria. Our engineering and general contracting businesses remain the key contributor to our revenue stream and Rail and Oil & Gas will continue to consolidate their presence in the GCC, North Africa and Levant. ”

“The solid performance of our business streams during this period resulted in a 115% increase in our EBITDA compared to last year. Improved collections and advanced payments on major projects boosted our net operating cash flow from AED 83 million in the previous quarter to AED 230 Million in Q3 2013.Our working capital was also significantly improved as we continue to focus on reducing receivables days and improving our cash conversion cycle to maintain liquidity and to deliver on our backlog," Tabari added.

Since the beginning of 2013, DSI has secured several major contract wins across the MENA region, bolstering the company’s backlog to $3.38bn (AED 12.4bn).

These have included a $453m deal in May for its general contracting arm Drake & Scull Construction to build the Lamar Towers in Jeddah; a $349m contract in September for a turnkey mixed-use development in Algeria; and joint venture deals with MEP contractor Habtoor Leighton Specon for work on the Abu Dhabi Louvre and the National Institute for Neurosciences and the Cancer & Cardiac Centre at the new King Fahad Medical City in Riyadh.

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