Bloomberg News

Drake & Scull Jumps to 7-Month High on Profit, Unit: Dubai Mover

February 13, 2012

Feb. 13 (Bloomberg) -- Drake & Scull International PJSC jumped to highest in seven months after full-year profit beat analysts’ estimates and the company set up a unit to benefit from railway projects in the Middle East.

The shares gained as much as 2.7 percent to 98.5 fils, the highest level since July, and were at 97 fils at 10:26 a.m. in Dubai. The stock has advanced 23 percent this year compared with a 10 percent increase in the benchmark DFM General Index.

Full-year profit climbed 36 percent to 220 million dirhams ($60 million), while revenue rose 68 percent to 3.1 billion dirhams, the Dubai-based construction company said in a statement. The mean estimate of 13 analysts was for a profit of 207 million dirhams, according to data compiled by Bloomberg.

“Revenue and earnings came in significantly ahead of consensus,” said analyst Jan Pawel Hasman at EFG-Hermes Holding SAE, who has a “buy” rating on the stock. “Net margin looks much stronger than usual at 7.4 percent in the fourth-quarter compared with 6.9 percent in the previous quarter, which could imply stronger than expected non-operating income.”

Drake & Scull has been expanding across the Middle East and North Africa since 2008 as the crisis in Dubai’s property caused orders to drop in its home market. By setting up a rail division, the company stands to benefit from contracts valued at more than $100 billion in markets such as Abu Dhabi and Qatar as the region establishes alternative trade links to sea.

Drake & Scull’s order backlog surged 43 percent last year to 7.1 billion dirhams, the company said. The value of projects it was awarded rose 29 percent to 4.4 billion dirhams.

“Our aim in 2012 is to sustain our growth in the Middle East and North Africa region and to pursue our expansion plan in Asia,” Chief Executive Officer Khaldoun Tabari said.

--Editors: Shaji Mathew, Claudia Maedler

To contact the reporter on this story: Zainab Fattah in Dubai at zfattah@bloomberg.net

To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net


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