Depa announces Q3 2011 trading results

Mohannad Sweid, CEO, Depa, right.

Depa interior contracting has announced its trading results for the third quarter, which ended September 30, 2011.

Mohannad Sweid, CEO, said Depa has seen a significant pick-up in business with projects which had been delayed, especially in the MENA region, now being signed into backlog. The Company signed AED 1.6 billion of new contracts boosting its backlog by 70% to a record high of AED 3.9 billion from AED 2.3 billion, as of June 30, 2011.

Whilst this stream of business vindicates Depa’s diversification strategy in recent years, it will take time to flow through to revenue and profits. This means that 2011 financials will remain close to forecast which was revised at the half year stage, with increased income coming through in 2012s numbers.

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The AED 929 million contract – Depa’s largest contract ever signed – is for the complete fit-out of 27 lounges at Doha’s new international airport. Lindner Depa, the company’s joint-venture, which specialises in infrastructure projects, will undertake the one year contract with immediate effect. 

“We are encouraged by the amount and diversity of new business signed during the quarter, a direct reward for pursuing our core strategy of diversification combined with more stringent project selection,” said Sweid.

“Despite European economic concerns and political uncertainty across many Arab countries, government spending, especially in the Gulf, continues to drive our backlog to its highest level ever and favourably positions the Company for the coming months giving us strong visibility on future revenue.”

The company has also entered the Qatar hospitality market through a major contract for both the interior fit-out and supply of furniture, fixtures and equipment (FF&E) of all 324 guest rooms and public areas of the Ramada Plaza, Doha. The contract is valued at AED 52 million and is to be completed by October 2012.

Design Studio, Depa’s Singapore and Exchange-listed subsidiary, recently reported its half year results with a 25% revenue increase and 30% jump in net profit; a strong order book of S$150 million, as of August 10, 2011, and a strong balance sheet of S$36 million in cash.

Malaysia, in particular, is proving a strong source of new growth and work is on-going at the Grand Hyatt Hotel and Lanson Palace in Kuala Lumpur as well as on a number of smaller projects.

Depa’s new factory in Guangzhou Province, China is on track to start production imminently.  It will support Design Studio’s manufacturing requirement helping Depa cater to the growing Chinese domestic demand for high-end interiors.

 

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