Drake & Scull booked AED 25 million provisions leading to a drop in 2014 profit

Drake & Scull International has booked AED 25 million provisions to cover expenses of some legal issues which will reflect on the company’s 2014 profit, CEO Zaina AlTabri told CNBC Arabiya.

If the company wins the cases, it will reflect positively on the results, she added.

Revenues will increase in 2014, but profit will drop between 10 to 15 percent, she said.

The company’s 2015 profit and revenue will increase in 2015 supported by high profit margin from the technological projects, she added.

The company’s profit dropped 29 percent to AED 87.6 million in the first 9 months of 2014. 3rd quarter profit dropped to AED 21.4 million, according to Argaam.

She added that there were AED 15.3 billion worth of projects in the pipeline. The  projects are growing in Saudi Arabia, UAE, Egypt, Qatar, Algeria, Kuwait and Jordan.

The company issued on Nov 16 $120 million unrated, unsecured 5-year sukuk through private placement to support the company’s operations in Saudi Arabia and emerging markets like Egypt, India and Algeria.

The company plans to buy an oil and gas company as well as financing its short-term debts. Up to 40 percent of the company’s projects are in Saudi Arabia.

Ms AlTabri expected to win a railway project in Saudi Arabia in 2015, noting that growth in railway projects are more sustainable because it is less competitive  than the construction sector.

The company plans to bid for projects in Qatar in 2015, she added. The company’s project in Egypt is still in the initial stage, adding that 17 percent of the company’s projects are in Egypt.