Dubai: Market conditions in the UAE and Middle East construction sector are unlikely to see any immediate improvement, with cash issues being the main factor, according to the Dubai-based interiors firm DEPA.
The construction sector also faces “difficult banking conditions, none of which are expected to improve in the near future,” the fitout company said as it announced first-half 2021 results that show a net loss of Dh39.8 million. Revenues were at Dh394.9 million against Dh526.6 million lst year.
Kevin Lewis, Group CEO, said: “Following the implementation of the Group’s transformation plan during 2020 and H1-2021, Depa has seen improved financial performance. Trading conditions for the Group remain challenging with the structural issues continuing in the construction sector in the Middle East.
“While the Group continues to secure new projects, the ongoing impact of COVID-19 on the global economy has seen some delays in project awards impacting the Group’s backlog position. Despite the challenging outlook, the fruits of our transformation programme are beginning to show with three of the Group’s KBUs returning to profitability: Depa Interiors, Deco Group and Vedder.”
The company has a project backlog valued at Dh1.06 billion. "Whilst Depa’s European business continues to perform strongly despite the uncertainty of COVID-19, the Middle East based business units have been adversely affected in terms of delayed project awards and the ongoing liquidity issues in the market which are not expected to improve in the near future," a statement said. "In Asia, DSG is currently focused on the execution of its restructuring plan."