Drake and Scull posts good growth in downturn

The engineering contractor based in Dubai records a 32 per cent rise in profit last year after winning seven contracts and expanding into busier areas of the sector and abroad.

Drake and Scull International (DSI), the engineering contractor based in Dubai, recorded a 32 per cent rise in profit last year after winning seven contracts and expanding into busier areas of the sector and abroad. The company will further broaden its scope this year with the acquisition of three companies, it said in a statement to the Dubai Financial Market (DFM). DSI floated shares on the DFM in March last year to help fund its expansion, making it the only UAE firm to go public in almost a year.

Profit for the year increased to Dh280 million (US$76.2m), from Dh212m in 2008, while revenue rose 10 per cent to Dh1.89 billion from Dh1.72bn. The gain was also helped by seven new contract wins in Sudan, Thailand and the GCC, worth a total of Dh2bn. They brought the company's backlog for the year to Dh3.3bn. "2009 was a year of transformation for DSI," said Khaldoun Tabari, the chief executive of DSI. "The company performed in line with our expectations and we have made good progress with our strategic priorities." Since January, DSI has picked up Dh369m worth of contracts for projects in Abu Dhabi. The company has also set up two new subsidiaries: Drake and Scull Water and Power, and Drake and Scull Construction.

DSI has weathered the global economic downturn better than rivals that were overexposed to residential building, which slowed dramatically last year as developers cancelled projects and slowed payment on others. The company plans to capitalise on the downturn to acquire firms with values that were badly hit, and strengthen its capacity in areas such as wastewater treatment and telecommunications infrastructure. Last December, it paid Dh80.5m to increase its stake in Kuwait's Electrical Contracting to 75 per cent. In November, the company paid Dh145m for an 82 per cent stake in Passavant-Roediger, a wastewater unit of Germany's Bilfinger Berger.

"As we enter 2010, we remain optimistic as we continue to invest in our growth strategy and engineering capabilities for the benefit of our employees, clients and shareholders," Mr Tabari said. "With three planned acquisitions in 2010, we are also poised and ready for steady horizontal growth." @Email:[e-mail]