Dubai - Arabstoday
Drake and Scull International (DSI) saw its net profit increase last year after adding a number of key infrastructure projects to its backlog. The contractor made a full-year profit of Dh220 million for 2011, the company said in a statement to the Dubai Financial Market yesterday without giving yearly or quarterly comparative figures. Following the announcement, shares in DSI advanced to an almost seven-month intraday high before closing at Dh0.97, up 1.15 per cent. DSI, which also plans to set up a railway division, said full-year revenue stood at Dh3.1 billion, adding the figures indicate a revenue growth of 68 per cent and a net profit growth of 36 per cent in comparison to 2010. \"2011 has been a year of growth and consolidation for the company as we have acquired four companies during the last two years that have significantly contributed to top line and bottom line growth,\" said Khaldoun Tabari, DSI\'s CEO. \"Our aim in 2012 is to sustain our growth in the Mena (Middle East and North Africa) region and to pursue our expansion plan in Asia,\" he added. DSI said total project awards announced in 2011 reached Dh4.4 billion against Dh3.4 billion in 2010, adding the order backlog reached a record high of Dh7.1 billion, a year-on-year increase of 43 per cent. Squeezed margins Tabari said last week that DSI was bidding on well over $500 million (Dh1.8 billion) of projects across the Mena region, adding that margins across the business were being \"squeezed\" due to competition. \"Drake and Scull\'s full-year results beat estimates largely backed by an increase in net margins in the fourth quarter compared to the third quarter,\" said Samer Darwiche, an analyst at Gulfmena Investments. \"The company also had a good year in terms of project backlog and in particular the awarding of a large contract in Saudi Arabia. Going forward, the focus will be on how much backlog they can add to their portfolio and at what margins,\" he added. Drake and Scull said last December its Saudi Arabian unit had won a contract valued at 130 million riyals (Dh127 million). \"Our focus remains on cost control and collections to ensure a healthy cash flow to maintain our strong balance sheet,\" said Osama Hamdan, DSI\'s chief financial officer, in a statement. \"The civil business was a major contributor to the revenues and we expect this trend to continue in 2012. We are confident that the secured backlog will guarantee steady revenue streams for the company to pursue its expansion plans in emerging and developing markets.\"