Depa back in black despite sales decline
Chairman says strategy of being more selective over projects has helped to improve margins
Dubai-based fitout contractor Depa announced a return to profit in 2014 despite a decline in its revenues.
The company declared a net profit of $13.4m, compared with a loss of $39m in 2013 that was blamed from the fall-out of its dispute over the Hamad International Airport contract. In 2013, provisions for doubtful debts stood at $25.6m, but this fell to just $3.5m last year.
Depa's sales for 2014 fell by 19% to $528m. Its backlog also fell by around 18% to $563m.
The company's chairman, Mohamed Al Fahim, said: “We have just completed another year of transition, led by a number of changes on the board. Despite the strong competition and challenging conditions within the industry, we have remained committed to our strategy of keeping a superior price point in line with the high quality of products we offer.
"As a result, our revenue and backlog have decreased on an annual basis. However, our decision to be more selective has ensured healthier margins, improved receivables collection and a profitable year with Depa returning to profits after posting significant losses previously.
"As we look ahead, we are engaged in further streamlining and consolidating our headquarters. Our objective is to reduce uncertainty and costs whilst concentrating on securing new global contracts that meet our requirements. We are in the right shape to capitalise on future growth and investment opportunities that will arise as markets improve.”
The company's biggest shareholder is contracting giant Arabtec, which retains a 24% stake in Depa.