Acquisitions help DSI to expand profit

Drake and Scull have increased their profits on the back of strong regional infrastructure spend

Drake & Scull International said full-year profit surged by more than a third as it tapped into increased infrastructure spending after the Arab Spring.

Net income for the Dubai engineering and construction company last year grew by 36 per cent to Dh220 million (US$59.8m), while revenue increased by more than two thirds to Dh3.1 billion.

Khaldoun Tabari, DSI's chief executive, pointed to the company's four regional acquisitions as profit drivers.

"Our aim in 2012 is to sustain our growth in the Mena [Middle East and North Africa] region and to pursue our expansion plan in Asia," Mr Tabari said.

"The top-line growth is attributed to the company's ability to secure more contracts in the region," said Osama Hamdan, the company's chief financial officer.

The company announced projects awards worth Dh4.4bn last year, a Dh1bn increase on the previous year. The order backlog reached a company record of Dh7.1bn, a year-over-year increase of 43 per cent.

DSI sought in recent years to broaden its footprint in the region. Last April, it spent 128 million riyals (Dh125.3m) to buy a contractor in Saudi Arabia, its second acquisition in the kingdom within 12 months.

DSI has been awarded a string of projects in the kingdom, including a 2bn riyal construction deal for the King Abdullah Petroleum Studies and Research Centerproject in Riyadh.

The company's order book has benefited from infrastructure spending in Gulf countries after the socio-political unrest in the Maghreb.

"Domestic contractors who have exposure to Saudi Arabia, Qatar and the UAE have actually benefited on the back of the new resolve to deliver infrastructure projects," said an equity analyst based in the UAE.

Before an exchange with investors tomorrow, it remains unclear if the earnings are all attributable to DSI, or if joint-venture partners in the region will receive some of the proceeds.

The company did not issue its full financial statements, which are expected to be published tomorrow.