New projects have bulked up Drake & Scull's book, and that will be a primary consideration for its lenders. Image Credit: Supplied

Dubai: The Dubai based contractor Drake & Scull International is making marginal gains in cutting down its accumulated losses, which has dropped to Dh4.89 billion from Dh5.005 billion as of December 31, 2019.

There are other positives too – gross profit was up at Dh21 million against Dh8 million in 2019. Net profit attributable to shareholders was Dh109 million, boosted by one-offs such as the gain from disposing off a subsidiary for Dh354 million. (Net profit in 2019 was Dh234 million.)

“The company still exists and is keen on the continuity of operations through ongoing projects,” said Munir Mansour, CEO. "The restructuring process has reached its final and advanced stages, as the expert appointed by the Financial Reorganization Committee - Aronite llc - have published in local newspapers invitations to creditors to attend the creditors' meetings which will be held on February 25."

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The latest numbers will likely fortify Drake & Scull’s chances of convincing its creditors and banks to extend its payment schedules, and that it can get back to being operationally sound. Ongoing and the backlog remain “stable” at Dh403 million, from operations in the UAE, Germany, Algeria, Kuwait and Iraq.

Rough recent history

The company has been through two tough years, starting off with losses. Then came internal investigations that showed the numbers provided weren’t all that transparent. In summer of 2019, the company finally revealed its accumulated losses were in the region of Dh5 billion plus and also launched investigations into the previous management.

The cases are now with Abu Dhabi Prosecution, as well as being pursued in Jordan, where the founder of Drake & Scull, Khaldoun Tabari, is currently based.

"With relation to civil cases filed in UAE against Khaldoun Al Tabari and others, the company has obtained several judgments in its’ favour before the First Instance Court," the company said in a statement. "The rest of the cases are still under review before the courts."

Winning away
A Drake & Scull subsidiary won two projects in Tunisia and India to develop sewage plants. The company is expanding its operations in oil and gas and focusing on completing its’ project in the city of Al-Zubair in Basra, Iraq.