Drake and Scull posts $98m Q3 loss

15/11/2017 17:14 AST

Drake & Scull International (DSI), a regional market leader in engineering and construction services, has registered a net loss of Dh359 million ($98 million) for the third quarter of 2017 mainly hit by overall productivity of projects.

Announcing the results for the three months ending September 30, the Dubai contractor said its revenue for the period stood at Dh590 million.

The lack of liquidity prior to the completion of the Recapitalization Programme and to the Dh500 million equity injection by Tabarak Investment impacted the overall productivity of its ongoing projects.

Consequently, additional provisions, revenue, and margin adjustments were recorded across several markets resulting in the Q3 net loss.

DSI said the ongoing projects portfolio in the UAE remained robust and continued to be the main revenue driver, (contributing 42 per cent of the company's Q3 revenue) with the debt restructuring positively progressing in the local market.

The new management continues to consolidate and streamline operations with a renewed focus on the UAE market, it stated.

According to the Dubai contractor, the debt restructuring effort is expected to be concluded across key markets in the fourth-quarter enabling the group to secure its funding requirements and to move forward with its turnaround plan.

Furthermore, the company revealed that the UAE project tenders in advance stages of negotiations were expected to materialize in Q4 2017.

The company's quarterly financial results were released as the new leadership team continues to review projects and identify pertinent risks to mitigate its exposure on the operating and financial performance of the group.

The move represents another essential step in DSI's operational restructuring, which will set the stage for improved and consistent performance in the coming quarters.

Rabih Abou Diwan, the investor relations director of DSI, said: "We expect our financial performance to normalise in the fiscal year 2018 in line with our continued pursuit of restructuring and reinforcing our operations."

"Our primary objective is to strengthen our financial position, to accelerate projects delivery and to improve the operational performance across all sectors," he noted.

"For the fourth quarter of 2017, we are confident that our performance will improve as we steam ahead with our restructuring programme. We reassure our shareholders that we are on the right track to restore our leadership position in the mechanical, electrical, and plumbing (MEP) sector as the new board of directors remains fully committed to stabilising the business and reinstating our trajectory for profitability and growth," he added.

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