PC: The National
Overview of Drake & Scull International’s Financial Turnaround
The Dubai-based contractor Drake & Scull International was successful in achieving one of the main milestones by returning to profitability in the first half of the year after rigorous debt restructuring. It is one of the major recoveries for the firm, which is facing an acute financial crisis since the last six years.
Financial Performance and Restructuring Details
DSI has just announced a net income of Dh30 million for the first half of the current fiscal year ending in June, compared to a loss of Dh163 million in the corresponding period a year earlier. This represents a turnaround – before the profit from the write-back of liabilities under the approved restructuring settlement plan that, at Dh3.76 billion, did much to strengthen its financial position. Including these write-offs, DSI’s half-yearly profit was Dh3.79 billion.
Challenges and Recovery Efforts
DSI chairman Shafiq Abdelhamid said the company had withstood “catastrophic financial, legal, and operational conditions” both inside and outside the UAE. Accumulated losses reached Dh5.5 billion, detailing thereby the depth of financial turmoil it has been facing, nearly bankrupt.
Restructuring Milestones and Market Resumption
It wrote off Dh4.18 billion of financial and commercial debts in June, a move that was the critical component of its restructuring process, and one that allowed it to return to trading on the Dubai Financial Market in May. DSI had been suspended for over five years, and the reinstatement saw it start participating in tenders and winning new projects.
Strategic Initiatives and Future Outlook
Under the current board’s stewardship, DSI has formulated a strategic long-term business plan that would right past errors and set transparent strategic objectives. Operational stabilisation, the restoration of investor confidence, and sustainable growth in its construction segment are now at the core of the company’s strategic priorities.
Sector Challenges and External Influences
The fall of DSI was also hastened by the three-year oil price slump from 2014, which hit hard at the broader property and construction sectors across the region. That the company has withstood all these odds goes to prove the strategic positioning it enjoys within the industry.
The turnaround of Drake & Scull International from financial turmoil to profitability is one of the more remarkable stories of turnarounds within the construction sector. Relaunching with a refocused strategy on transparency, strategic planning, and operational excellence, DSI stands ready to rebuild its market position and become a positive contributor to the growth trajectory of the industry.
