Drake & Scull International (DSI) posted a 38 per cent fall in net profit in the first quarter of this year as it suffered operational setbacks in Saudi Arabia amid regional volatile market conditions and a liquidity crunch in the contracting industry.
Net profit dipped to Dh25 million from Dh40.3m in the year- earlier period, the Dubai-based firm said.
“We are still dealing with some major operational setbacks in Saudi Arabia, which will continue to have a far-reaching effect on our performance in 2015,” the company said. “Our results in the first quarter of this year largely reflect the sense of cautious progress in our regional industry.”
It did not elaborate on the operational issues it faced in Saudi Arabia.
DSI said in February that the size of its operations in the kingdom, its biggest market, meant that it was forced to strain its liquidity attempting to overcome payment delays.
Saudi Arabia began a clampdown on illegal workers in 2013, increasing the costs of employing local workers.
Its order backlog grew year on year by 13 per cent to Dh13.8 billion. Saudi Arabia and the UAE are the largest contributors to the backlog, accounting for 33 per cent and 21 per cent, respectively, the company said.
“The recent spate of project announcements from the major markets of the region – Saudi Arabia, the UAE and Qatar in the residential, hospitality and rail sectors has infused the industry with a lot of confidence to push ahead with the vital infrastructure development needed to cater to the growing regional population,” DSI said.
DSI’s profits plunged 71 per cent in the fourth quarter of last year, driven lower by a slowdown in the Saudi and UAE property markets.
dalsaadi@thenational.com
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