Drake & Scull Q3 profit down 45%

Dubai contractor Drake & Scull International reported a 45 per cent drop in profit on Monday, below expectations, as the company focuses on expanding its operations and entering new markets.

Net profit in the June-September quarter fell 45 per cent from a year earlier to Dh34.1million ($9.3m), the developer said in a statement.

The results fell short of the average estimates of four analysts polled by Reuters that stood at Dh41m.
Shares in DSI fell 2.7 per cent on the Dubai bourse to Dh0.963, while the broader market fell 1.35 per cent.

Revenue rose 8.2 per cent to Dh432m and the company said it sees sustainable growth in 2011 and beyond.

Drake, which specialises in mechanical, engineering and plumbing businesses (MEP), has been rapidly expanding its operations outside Dubai, where house prices have plunged some 60 per cent since their peaks in 2008 as a result of the financial crisis. The company said that the Q3 results reflect the measure and outcome of their expansion.

"The company's current backlog stands at Dh4.7bn and we anticipate Dh1bn worth of new projects till the end of the year as a result of our aggressive expansion plans," Khaldoun Tabari, DSI's chief executive, said in a statement.
He said Abu Dhabi and Saudi Arabia will generate the majority of the new projects for the company.

Drake also announced that its board has approved the sales and purchase agreement of the acquisition of an MEP company in Saudi Arabia. DSI acquired 65 per cent of Drake & Skull International Saudi WLL for Dh243m.

Drake's projects include luxury hotels such as the Shangri-La Qaryat Al Beri in Abu Dhabi

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