Drake & Scull returns to profit amid cost cuts
Drake & Scull International reported a return to profitability in the first quarter as the company restructures the business and cuts costs implemented by its new management.
The Dubai-listed engineering and construction services firm said net income for the first three months of the year was Dh7 million compared with a loss of Dh839m in the same period a year earlier. The company managed to record a profit despite a drop in quarterly revenue, which slumped to Dh693m, a 13 per cent year-on-on-year decline, the company said in a statement on Tuesday.
“Reforms implemented by the new management have added significant strategic and operational impetus, in terms of efficiency and productivity measures achieved during the quarter," said Rabih Abou Diwan, the head of investor relations. "We will continue to leverage the synergies across our operating segments to improve our operating performance by reducing our overheads and by re-calibrating our services portfolio to drive margin accretion.”
Drake & Scull’s project backlog stood at Dh5.4bn at the end of the first quarter, bolstered by Dh305m of projects secured in its home market since the beginning of the year.
In March the company said it would appoint Fadi Feghali as chief executive, a post that had been vacant since August. Mr Feghali assumed his role on April 1.
Mr Feghali, who previously managed the international business units of DSI, succeeded Wael Allan, whose tenure ended in August by the board of directors amid a management shake-up. Mr Allan had assumed the post in October of 2016 after the long-standing chief executive Khaldoun Tabari stepped down.
Drake & Scull's main business lines include engineering, construction, and oil and gas.