Has announced the planned acquisition of a civil contracting company in Saudi Arabia

In an announcement, Drake & Scull International PJSC (DSI) has reported Dh432 million in revenue and a net profit of Dh34 million for the third quarter ending September 30, 2010 – yielding an accumulated revenue of Dh1.2 billion and Dh121 million net profit in the first nine months of this year.

Khaldoun Tabari, CEO of DSI, stated: “This year, we have invested a significant amount of resources into expanding our operations and entering new markets. Consequently, the results this quarter reflect the measure and the outcome of our expansion, and we remain optimistic about the future outlook of the company, as we believe these activities will pave the way for sustainable growth in 2011 and beyond.”

Since the beginning of 2010, the company has reportedly set up offices in Egypt, Syria, Oman and Saudi Arabia.

“The company’s current backlog stands at Dh4.7 billion and we anticipate dirhams one billion worth of new projects till the end of the year, as a result of our aggressive expansion plans,” Tabari explained. “It is likely that Abu Dhabi and Saudi Arabia will generate the majority of these.”

Commenting on the Q3 results, the CFO of DSI, Osama Hamdan, said, “Delay in execution of newly awarded projects affected our profit stream, especially when our overheads and preconstruction expenses are continually incurred.” He added: “Civil contracting projects have contributed to 25% of total revenues in the third quarter. In this quarter, we have progressed well on our civil business, and this has been the key contributor to the revenues. However, this has also impacted our overall margins, as the civil business has lower margins as compared to our other MEP and water and power businesses.”

According to the announcement, DSI across its business streams, has been awarded 22 projects in the region since the beginning of 2010, bringing the combined value of projects won to Dh2.8 billion.

Along with the announcement of its Q3 results, the company also announced that its board had approved the Sales & Purchase Agreement of the acquisition of an MEP company in the Kingdom of Saudi Arabia. DSI PJSC acquired 65% of Drake & Scull International Saudi WLL for Dh243 million. The Saudi company’s backlog currently stands at SAR 815 million (Dh796 million). The acquisition, said DSI PJSC, will increase the geographical diversity of its operations across the Middle East and the North Africa region, while creating additional opportunities for sustainable business growth and increased shareholder value.