Abu Dhabi: Dubai based construction firm Drake & Scull International (DSI) said profits for the fiscal year 2014 declined due to delays in the completion of projects in Saudi Arabia and by receivable provisions in the UAE.
The company released the preliminary financial results for the fiscal year 2014 on Sunday. It reported Dh110 million in net profits, a 34 per cent slump from the Dh166.5 million reported for the earlier period, according to data complied by Bloomberg. The company posted Dh4.83 billion in revenues.
Khaldoun Tabari, CEO of DSI said in a statement that the economic scenario in the region underwent a rapid change in the last few months which has had an impact on the regional construction industry. “A cautious sentiment in the real estate sector has led developers to become more price conscious, which has lengthened the project development cycle in all our key markets. This has resulted in delays in our collections which created a slowdown in our revenue generation. The impact of this also affected our profitability margins.” he said.
The company had a strong start in the first half of the year with a lot of positive momentum in the form of multiple project awards in the region and especially the UAE.
“In the second half of the year, the entire region experienced unforeseen global economic challenges and uneven geopolitical developments that had a far reaching effect on the region’s economy,” Tabari said. “From a corporate perspective, we experienced considerable delays in our operations, particularly in our biggest market Saudi Arabia, which had a significant impression on our top line target for the year.”
According to the company statement, the order backlog reached a record high of Dh14.4 billion representing a year-on-year increase of 20 per cent. Saudi Arabia and the UAE markets remain the largest contributors to the backlog accounting for 34 per cent and 18 per cent respectively.
