Drake & Scull Q3 net up 76%

Drake & Scull International  posted a 76 per cent increase in third-quarter net profit on Sunday, beating analysts forecasts, and the contracting firm said it expects to maintain profit growth in the fourth quarter.

The Dubai-based company made a net profit of Dh60m in the third quarter, compared with 34 million dirhams made in the prior-year period, it said in a statement to the Dubai bourse.

Analyst polled by Reuters forecast a profit of 48.5 million dirhams for the third-quarter.  

Revenue for the third quarter was 847 million dirhams, its said, up 96 per cent from Dh432m in the third quarter of 2010.

Total projects awarded year-to-date totalled Dh3.6bn.

Construction companies in the UAE, slowly recovering from a property market collapse where house prices fell more than 60 percent, are expected to see further pressure following fears of another global recession and the European debt crisis. 

Credit Suisse cut its price target on Drake and Arabtec  in September citing lower margin estimates and a slump in contract awards for the companies. 

Drake, whose biggest market is Saudi Arabia, has been looking to rapidly expand its operations outside Dubai. The company is currently bidding for projects in both Asia and the Middle East and North Africa.  

"We expect a pickup in our backlog in the fourth quarter as we anticipate new project announcements," Chief Financial Officer Osama Hamdan said in the statement. 

Dubai's largest developer Emaar Properties saw its profits drop by 34 per cent, impacted by the emirate's weak property sector.  

Drake's shares have fallen 21 per cent year-to-date. 

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