Depa reports a first-half profit after losses last year

Burj Khalifa

Depa Ltd, the interior contractor that fitted out Burj Khalifa, the world’s tallest tower in Dubai, reported a first-half profit after a loss in the year-earlier period.

Net income was AED48m ($13.06m) after a loss of AED103.7m in H1 2010, DEPA reported.

Revenues for the first half of 2011 were AED748.9m, down 11.4% on H1 2010 due to delayed starts and slow progress on certain projects in the MENA region, especially in countries currently facing political turmoil, Depa added.

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Excluding the MENA region, the company’s revenues rose by 42.9% to AED297.5m while contract profit margin was 20.4% compared to -3.3% in H1 2010.

“Overall performance was strong on many fronts. Our successful diversification strategy reduced the impact of the global macroeconomic and regional geo-political environment on our results and backlog growth,” said Mohannad Sweid, CEO, Depa.

“Encouragingly, we are witnessing large and mega-projects that were originally delayed finally coming on-stream. The company continues to diversify internationally and this will underpin financial performance and backlog growth and allow Depa to capitalise on the market’s momentum in the near future,” he added.

As of the end of June, the company’s backlog stood at AED2.3bn, and had increased by a further AED420m as of August 20.

Depa said over the course of 2011, it had won new contracts of a total value of AED1.47bn resulting in a 24% growth in backlog. Sweid added Depa expects to sign other delayed projects in the latter half of 2011 and on-going into 2012..

The UAE now represents only 21% of backlog, while MENA is up to 30% and the rest of world has risen to 49%.

The company said it has seen continued significant revenue stream from Asian projects, with the wider region and in particular South East Asia.

Azerbaijan and Saudi Arabia have both proven to be significant contributors to revenue and backlog in H1 2011, Depa added.

The company added that it expected to win large project in the GCC region over the coming year. “We believe that a second growth run, namely in government-related spending in the GCC and CIS countries may be the around the corner, allowing us to leverage our already-existing operations to further grow in these markets. We also look to continue to sign an increasing number of projects in Asia, as well as augment our portfolio in Europe,” Depa added in the statement.

The Dubai-based contractor said in May it had won new contracts included an AED121m deal in Azerbaijan and a contract to fit out a new JW Marriott Hotel in Baku, worth AED41m. The company in April won an AED11.9m deal to fit out Raithwaite Hall Country Retreat, a luxury country resort in the UK.

It has also won a AED222m contract for King Abdullah Petroleum Studies & Research Centre, Riyadh, Saudi Arabia, where it will work on all architectural finishes of the Zaha Hadid-designed project.and a AED113m contract for the Mumbai International Airport, India.

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