Drake & Scull's Q3 2024: A Turnaround Story
Drake & Scull International PJSC reports a net profit in Q3 2024, marking a significant turnaround post-restructuring.
Summary
Drake & Scull International PJSC has reported a net profit of AED 5.9 million for Q3 2024, driven by increased revenue and successful restructuring.
Drake & Scull International PJSC (DSI), a leading player in the contracting services sector, has reported a remarkable turnaround in its financial performance for the third quarter of 2024. The company, which specializes in mechanical, electrical, and plumbing (MEP) services, as well as oil and gas, water, and wastewater treatment projects, has achieved a net profit of AED 5.9 million. This marks a significant recovery from the net loss of AED 34.9 million reported in the same period last year.
The company's revenue for Q3 2024 reached AED 21.5 million, reflecting a 13% increase from AED 18.9 million in Q3 2023. This growth is attributed to heightened activity in key markets such as India, Romania, and Tunisia. The year-to-date profit for the nine months ending September 30, 2024, stands at AED 3.8 billion, a substantial improvement from the AED 197.5 million loss recorded in the same period of the previous year. This dramatic change is primarily due to the AED 3.75 billion in liabilities written back as part of the company's restructuring efforts.
The restructuring process has significantly strengthened DSI's financial position. Total assets have increased to AED 715.6 million as of September 30, 2024, up from AED 350.4 million at the end of 2023. The company's equity position has also improved to AED 174.1 million, compared to a deficit of AED 4.4 billion as of December 31, 2023. The reduction in financial obligations through the conversion of debt into Mandatory Convertible Sukuks (MCSs) has enhanced DSI's liquidity and financial flexibility.
Despite these positive developments, potential investors should approach with a degree of caution. The financial restructuring has undoubtedly placed DSI on a more stable footing, but the company's future growth will depend on its ability to maintain this momentum and effectively leverage its improved financial position. Therefore, for investors considering DSI, a hold position might be prudent at this stage, allowing time to assess the company's ongoing performance and strategic direction.
Source
Summary
Drake and Scull International PJSC reported a net profit of AED 5.9 million for the third quarter of 2024, marking a significant improvement from a net loss of AED 34.9 million in the same period last year. The company's revenues grew by 13% to AED 21.5 million, driven by increased activity in India, Romania, and Tunisia. For the first nine months of 2024, Drake and Scull achieved a year-to-date profit of AED 3.8 billion, largely due to a write-back of AED 3.75 billion in liabilities as part of their restructuring process. Earnings per share for this period were AED 1.88, compared to a loss per share of AED 0.18 last year. The restructuring has strengthened the company's financial position, increasing total assets to AED 715.6 million and improving equity to AED 174.1 million, while also reducing debt through the conversion of some obligations into Mandatory Convertible Sukuks.
