Dubai: Drake & Scull International PJSC, a Dubai-based engineering and construction company, reported its first quarterly loss and said it’s planning to sell non-core assets and cut cost to generate cash. The shares slid to a record low.
The company posted an Dh877.8 million ($239 million) attributable net loss in the three months through September, compared with profit of Dh21.4 million a year earlier, it said in statement Sunday to the Dubai stock market. The mean estimate of three analysts was for profit of Dh16.2 million.
Drake & Scull joins larger rival Arabtec Holding Co in reporting losses because of “challenging market conditions”. The company said it made one-off provisions and revenue adjustments after the decline in oil prices caused developers and clients to defer payments and delay projects across several markets.
Drake & Scull shares fell 10 per cent to 41 fils, the lowest on record since the company’s initial public offering in 2009. The drop was the biggest since December 2014.
Contract revenue
Contract revenue slumped to Dh434 million from Dh1.24 billion in the year earlier period. Drake & Scull also reported third-quarter provisions, revenue and gross profit adjustments of Dh984 million, with a total order backlog of Dh12.35 billion.
“The Company has initiated a cost-cutting programme to improve operational efficiency and reduce SG&A.,” it said, referring to expenses. “The company is also taking a number of measures to boost working capital, reduce debt levels and improve the capital structure by selling non-core assets to generate cash and improve liquidity.”
Drake & Scull has taken number of one-off provisions related to ongoing arbitration, legal cases in United Arab Emirates and Saudi Arabia. It also made revenue and gross profit adjustments for “uncertified variations” across several major projects in Gulf.
