(MENAFN - Khaleej Times) Drake & Scull International, or DSI, a construction giant, on Wednesday posted Dh1.494 billion in revenues and Dh75 million in net profits in 2012 first half, and said company is well on track in achieving its growth objectives for the year.
DSI said the results represented a top line growth of 8.3 per cent and a bottom line contraction of 29 per cent in comparison to the first half of 2011.
Year to date DSI secured contracts worth Dh1.6 billion which will guarantee a steady revenue stream for the company in the second half of the year.
The company, which specialises in mechanical, engineering and plumbing operations, said in a statement that it managed to sustain its order backlog at Dh7.4 billion recorded as of the 30th of June 2012.
For the second quarter 2012, DSI recorded a net profit of Dh32 million and Dh717 million in revenues. The quarterly figures indicate a three per cent decline in revenues and 42 per cent drop in net earnings compared to 2011 second quarter. Earnings per share were Dh0.012 compared with Dh0.024 recorded during the same period last year.
Project awards for the quarter reached Dh646 million secured in Abu Dhabi, Dubai and Oman.
The results of the first half of the year and the revenue growth in comparison to the first half of 2011 indicates that the company is well on track in achieving its growth objectives for the year, DSI said in a statement.
The firm said it is expanding into rail and oil & gas and both business units are expected to contribute to the revenue in the second half of the year.
Osama Hamdan, CFO of DSI said the company managed to report profits and higher revenue growth in the first half of the year despite challenging market conditions and in comparison to the first half of 2011.
"Lower productivity on major projects and especially in KSA contributed to the decrease in revenues in the second quarter. Finance cost from acquisition funding and contracts provisioning continue to hinder profit growth. Our exposure to the Euro currency through our German Subsidiary and the volatile fluctuation in foreign exchange also contributed to the decline in earnings. Overall revenue growth for first half indicates the improvement in operational efficiency, the focus in the second half will be to improve profitability and achieve higher earnings."
The MEP business will continue to be the main driver of our net margin growth while gross margins are expected to improve after all directs expenses related to the establishment of news offices in Iraq, India and Algeria are completely rendered and incurred.
The company continues successfully in reducing its receivables through improved collections during the quarter. Contract provisioning is also expected to be extended to the second half of the year which is normal due the cyclical nature of the construction business in the region. However, the productivity on major projects across the region is expected to improve, Hamdan said. In June, bagged a series of MEP contracts in Oman across several sectors collectively worth Dh96 million.