DSI full year net loss widens, but posts profit in fourth quarter

The company is focusing on core business and cutting costs

Mr Feghali, who currently manages the international business units of DSI, succeeds Wael Allan. Rich-Joseph Facun / The National

Drake & Scull International, the Dubai-listed contractor seeking to restructure around Dh1 billion of debt, on Wednesday said its full-year net loss widened despite posting a profit in the fourth quarter of 2017.

Full-year net loss  deepened to Dh1.39 billion from Dh815m, the company said in a statement to the Dubai Financial Market, where its shares are traded.

Net profit in the three months to the end of December reached Dh0.7m compared to a net loss of Dh359m in the third quarter. It didn't provide comparative figures for the fourth quarter of 2016.

Net income in the last three months of 2017 beat the estimate of a net loss of Dh115m by NBAD Securities in a Bloomberg poll.
Fourth quarter revenue also recorded the a quarter-on-quarter increase of 11 per cent to Dh656m, the company added.

"The company remains committed towards the realisation of the recovery objectives set forth by the new leadership team appointed in the fourth quarter of 2017 to steer the company back to recovery and growth," DSI said. "Several organisational restructuring initiatives were executed in the [last] quarter to streamline operations, reduce cost, and improve efficiency."

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The contracting firm said in January it expects to finalise restructuring of approximately Dh1bn of debt it raised for projects in Saudi Arabia by March-end this year. It will also begin negotiations with bondholders in the UAE to refinance Dh440m worth of sukuk in the second half of 2018.

The Dubai contractor, which was hit hard by a slowdown in the Arabian Gulf economies, has already reached an agreement with a group of nine lenders to refinance Dh566m of corporate debt.

Under the deal, agreed in the fourth quarter of 2017, the banks on average have extended the maturities by three years on loans, representing 56 per cent of the company’s total corporate general debt, which at the end of September last year stood at Dh1.07bn.

“The company continues with its operational review across key markets and is undertaking key measures to mitigate contingent exposure of legacy projects,” it said.

“The Group is also accelerating projects bidding in key markets across all sectors and is undertaking several proactive measures to regain market share and restore its leadership in the region.”

The contractor has a projects backlog of Dh5.5bn and is focusing on its mechanical, electrical and plumbing business in the UAE and Saudi Arabia.