Dubai’s Drake & Scull Q1 net profit slumps 61%

DUBAI: Dubai’s Drake & Scull (DSI) posted a 61 percent fall in first-quarter net profit , extending an earnings slump as its revenue declined.
The contractor made a net profit attributable to shareholders of AED9.8 million ($2.67 million) in the three months to March 31, it said in a statement. This compares with a profit of AED25.1 million in the year-earlier period.
EFG Hermes forecast DSI would make a quarterly net profit of AED20.1 million.
DSI had reported worsening earnings in seven of the preceding eight quarters, a slump it blamed on a slowdown in the Gulf construction sector. This included a substantial loss in the third quarter of 2015 due to provisioning.
DSI’s first-quarter revenue was AED1.03 billion, down 7.2 percent from AED 1.11 billion a year earlier. Costs shrank by a smaller margin, falling 5.1 percent to AED956.1 million.
Last week, the firm announced the appointment of two senior executives as it sought to overcome challenging market conditions.
Wael Allan has been appointed as the group’s new chief operating officer while Kailash Sadangi has been named chief financial officer with immediate effect, the contracting giant said in a statement.
Both will report directly to Khaldoun Tabari, CEO and vice-chairman of Drake & Scull International.
The company said the appointments reflect DSI’s “strategic initiatives and operational focus in light of the challenging market conditions across the region.”