Drake & Scull swings to full-year profit

The company made a Dh354m gain on the disposal of one of its subsidiaries

Drake & Scull has convened online meetings for bank and trade creditors for February 25 to talk through its restructuring plans. Rich-Joseph Facun / The National

Drake & Scull swung back to profit in 2020 as it made a Dh354 million gain on the disposal of one of its subsidiaries.

The company reported a net profit to shareholders of Dh109m, compared to a net loss of Dh87m in the prior year, according to a statement filed to the Dubai Financial Market.

Profit from continuing operations, however, fell 45 per cent to Dh128m as revenue declined 68 per cent to Dh216m.

Drake & Scull "still exists and is keen on the continuity of the operations of the company and its subsidiaries" through the delivery of water and energy projects in several markets, chief executive Munir Mansour said in the statement.

One of the contractor's subsidiaries won two new projects in Tunisia and India to develop sewage plants and the company is looking to expand in oil and gas, as it completes a project in the city of Basra in Iraq, Mr Mansour said. The company is also looking to secure new work in Kuwait and Egypt.

The profit achieved during the year means Drake & Scull managed to reduce its accumulated losses to nearly Dh4.9bn, compared to Dh5bn at the end of 2019. Shareholders' equity also improved marginally to a negative Dh3.75bn as of December 31, compared to negative Dh3.86bn a year earlier.

The reduction of negative equity and consistent gross profits is a "result of the perseverance of the executive management ... to improve the financial position and to ensure the continuity of the company’s operations by implementing the pillars of the restructuring plan and by reducing various administrative and operational expenses," Drake & Scull said in its statement.

The company said the restructuring process has now reached its "final and advanced stages".

The Financial Reorganisation Committee appointed Aaronite & Partners to handle the turnaround and meetings for both bank and trade creditors are due to be held online "on or around" February 25 to discuss restructuring plans, according to a statement filed by the company earlier this week.