Towering change of fortune for Depa
Depa, the company that helped to fit out the world's tallest tower in Dubai, has swung to a first half profit on higher contract profit margins.
Net income at the Dubai-based interior designer was Dh48 million for the period ended June 30, from a loss of Dh103.7m in the same period last year, the company said.
Contract profit margin surged to 20.4 per cent in the first half of this year, compared to negative 3.3 per cent in the same period last year.
The company reported a steady increase in backlog in the first half of the year, winning a total value of Dh1.47 billion of new projects, resulting in a 24 per cent increase in backlog growth.
"The company is beginning to witness backlog growth as some anticipated large and mega-projects, as well as many other projects, have begun to come on stream in the GCC - and as increased diversification efforts have started to bear fruit," Mohannad Sweid, the chief executive at Depa said.
The company's backlog stood at Dh2.3bn in the first half and had increased by Dh420m as of August 20, bringing the total value to Dh2.72bn.
The UAE now represents only 21 per cent of backlog, down from 30 per cent last year, a statement from the company said.
Revenues declined by 11 per cent to Dh748.9m, compared with Dh845.5m last year, as the company faced "delayed starts and slow progress in the Mena [Middle Eastand North Africa] region, especially in countries currently facing political turmoil".
"Looking forward, based on our understanding of the current market trends, we continue to expect large project wins in the GCC region over the coming year as momentum begins to pick up and projects near the interior contracting scope of work," the statement said.
Shares of Depa, listed on the Nasdaq Dubai exchange, have declined 32 per cent since January to US 47 cents a share.
Published: August 25, 2011 04:00 AM