Drake & Scull Q1 profit falls 18pc as costs rise
Dubai, May 15, 2012
Dubai-based contractor Drake & Scull reported an 18-percent drop in quarterly profit on Tuesday, falling short of analysts' estimates, due to higher costs.
The firm, which specialises in mechanical, engineering and plumbing operations, made a first-quarter net profit of 37.6 million dirhams ($10.24 million) in the quarter ended March 31. That is down from 45.9 million dirhams in the year-earlier period, according to a statement.
Analysts had forecast average quarterly profit of 56.5 million dirhams, in a Reuters poll. Drake shares were down 2.56 percent at 0637 GMT on the Dubai index, which was trading flat.
Drake's quarterly contract revenue was 776.7 million dirhams, up 20.4 percent. Contract costs rose 22.6 percent while general expenses were up 16.7 percent, weighing on profit.
The firm, which saw financing costs ease, also booked a 3.6 million dirham fair value loss on financial assets in the quarter.
Chief Executive Khaldoun Tabari said Drake, which operates in the Middle East as well as Thailand and Germany, will expand further into North Africa and Asia. He added that the firm has bid for rail contracts in the Gulf region. - Reuters