Dubai-based Drake & Scull International recorded a net loss of AED359 million ($97.7 million) in Q3 2017, largely due to a lack of liquidity before the completion of a recapitalisation programme and AED500 million ($136.1 million) equity injection by Tabarak Investment, the firm said on Wednesday.
The Dubai-based contracting giant said in a statement that Q3 2017 revenue stood at AED590 million ($160.6 million), 42 percent of which was drawn from its ongoing UAE projects.
The lack of liquidity prior to the debt restructuring and equity injection, however, had a negative impact on the overall productivity of ongoing projects – coupled with additional provisions, revenue and margin adjustments – resulted in the losses.
According to the firm, the debt restructuring process is expected to conclude in Q4, allowing the group to secure its funding requirements as it moves forward with advanced negotiations on a number of new UAE project tenders.
“We expect our financial performance to normalize in the fiscal year 2018 in line with our continued pursuit of restructuring and reinforcing our operations. Our primary objective is to strengthen our financial position, to accelerate projects delivery and to improve the operational performance across all sectors,” said Rabih Abou Diwan.
Abou Diwan added that the company is “confident” that performance will improve in Q4.
“We reassure our shareholders that we are on the right track to restore our leadership position in the mechanical, electrical, and plumbing (MEP) sector as the new board of directors remains fully committed to stabilizing the business and reinstating our trajectory for profitability and growth,” he said.
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