DSI losses widen to Dh1.4b in 2017

Firm’s fourth quarter profit of Dh700,000 is a turnaround from losses in the same period in 2016

Drake and Scull International (DSI) yesterday reported Dh1.39 billion in net loss for 2017, as losses widened from the Dh815 million recorded in 2016.

In the fourth quarter of 2017, however, the company recorded a profit of Dh700,000, a turnaround from the Dh518 million in losses in the fourth quarter of 2016.

Revenues for the year also slowed down to Dh2.7 billion from Dh3.2 billion a year earlier.

The losses come during a year that saw the contractor complete its capital restructuring programme, which included reducing its capital by 75 per cent followed by a capital increase.

The latter move saw Tabarak Investment injecting Dh500 million to raise DSI’s capital. DSI said the capital will be used to accelerate project execution, secure new projects, and pursue new opportunities. DSI’s capital currently stands at Dh1.07 billion.

DSI also completed the restructuring of its bank debt in the UAE and secured new credit lines.

In its statement on Wednesday, the Dubai-listed company did not elaborate on its outlook or why its losses widened during the year. The company said it executed “several organisational restructuring initiatives” in the fourth quarter of 2017 to reduce costs and streamline operations.

“The company continues with its operational review across key markets, and is undertaking key measures to mitigate contingent exposure of legacy projects,” the statement said.

“The group is also accelerating projects bidding in key markets across all sectors and is undertaking several proactive measures to regain market share …”

The total projects backlog at the end of 2017 stood at Dh5.5 billion, DSI said.

DSI’s share prices were nearly flat yesterday, ending the day 0.54 per cent higher at Dh1.86 as investor appetite remained subdued due to uncertainty in international stock markets.

Losses per share in 2017 were at Dh1.1 compared to Dh0.32 in 2016.