Dubai’s Drake & Scull International’s third-quarter profit plunged 93 per cent, widely missing analysts’ forecasts as the contracting firm was hard hit by higher costs and falling contract revenue.
The company, which specialises in mechanical, engineering and plumbing operations, posted a third-quarter net profit of Dhs3.9 million ($1.06 million), compared with a profit of Dhs57.5 million during the same period in 2011, it said in a bourse statement on Sunday.
The quarterly profit missed the average forecast of six analysts polled by Reuters, who expected a profit of Dhs40.6 million for the third-quarter.
Drake said contract revenue for the quarter was Dhs622.8 million, a 26.5-per cent drop from the Dhs846.7 million revenue for the year-ago period.
Expenses rose to Dhs81.5 million from Dhs68.7 million a year ago, Drake said in the statement.
Drake has been gradually expanding its operations outside of Dubai following a slowdown in the emirate’s once-booming real estate sector, last week announcing three contracts worth a total of $86.7 million in Abu Dhabi and Saudi Arabia.
The company last week also said it had signed a $120 million equivalent loan facility to support its growth into other markets. Goldman Sachs Inc acted as a coordinator for the loan facility.
Its shares have risen 5.3 per cent year-to-date, underperforming the wider benchmark which has gained 19.5 per cent during the same period.