Depa Limited: Interim Results 2010Aug 26 ,2010
Depa Limited (ticker: DEPA) (‘DEPA’ or ‘the Company’), one of the world's largest interior contractors today reported results for the six months ended 30 June 2010.
- Operational performance in line with expectations, despite ongoing difficult market conditions
- An outstanding interim claim relating to Burj Khalifa project, significantly impacting interim results ; claim should be resolved in time
- Net profit, before accounting for expenses related to the interim claim is AED 82m for H1 2010, (H1 2009: AED 92m). Company reported net loss position of AED -103.6m due to impact of interim claim
- Company remains healthy and is in strong position to pursue exciting growth opportunities
- Backlog increased to AED 2.4bn as of 25 August (FY 2009: AED 2.1 bn)
- Significant project wins including AED 104m fit-out contract for IPIC (International Petroleum Investment Company) in Abu Dhabi and AED 220m fit-out of a five-star hotel in Angola
- Continued focus on sector and geographical diversification:
- Strong revenue growth in Abu Dhabi, Singapore
- Project wins in Malaysia , Saudi Arabia, Qatar, and China
- Infrastructure revenue up 24% to AED 82m (H1 2009: AED 66m)
- Positive cash-flow from operating activities stands at AED 35.6m (H1 2009: AED -15m)
Mr Mohannad Sweid, CEO of Depa, commented:
“Our underlying business is proving to be resilient in tough economic times. We continue to have a healthy cash position and strong backlog and our ability to win significant projects, in both established and new territories, reflects our strengths, our brand distinction and market leading position. We remain well positioned for a recovery and are in discussions with potential clients over exciting new projects in different locations. We will keep pursuing our diversification strategy which has proven to be very successful and has helped us weather the downturn.”
Despite ongoing difficult market conditions throughout the first half of the 2010, Depa has performed in line with expectations on an operational level. The Company continues to pursue a successful diversification strategy with an increasing proportion of revenues and backlog being derived from markets outside of Dubai and across different sectors. Depa continues to win important and large projects despite the difficult market environment and is in a strong position to pursue future growth opportunities.
However, during the period, Depa has faced one outstanding interim claim relating to the Burj Khalifa project, which has had a significant impact on the Company’s interim results. This is an exceptional circumstance which, management strongly believes, is not reflective of the Company’s strength and future prospects and should be resolved in time. Management has had to account for expenses related to this interim claim as a project expense, with no related revenue in H1 2010. Consequently, net profits (excluding the charge and including net provisions) would stand at AED 81m for H1 2010, indicating a flat position compared to the same period last year, rather than a net loss position of AED -103.6m.
As of June 30, 2010, it stood at AED 2.15 billion as compared with AED 2.6 billion at the same time last year, with an increasing amount being derived from outside of Dubai. As of 25 August 2010, the backlog had increased further to AED 2.4 billion. Year to date, Depa has signed several significant contracts including: AED 104m for the refurbishment of IPIC (International Petroleum Investment Company) in Abu Dhabi; AED 220m fit out and furniture, fixtures and equipment (FF&E) of a five-star hotel in Angola; and a five-star hotel in Malaysia.
Management expects the backlog to remain at this healthy level and additional large contracts to materialise by the end of the year reflecting the strength of the Company despite the economic environment.
Due to our continued long-term focus and efforts on geographical diversification, the Company continues to increase the proportion of revenues and backlog derived from outside of Dubai, notably from Singapore and Abu Dhabi, and has also won significant projects in Malaysia, Saudi Arabia, Qatar and China. Depa’s Abu Dhabi operations, for example, performed very strongly with revenues up 51% to AED 195.3m (H1 2009: AED 129.2m). Revenues from South East Asian operations represented 14.3% of the Company’s total revenues in H1 2010 (H1 2009: 4.9%). The Company also continues to diversify in terms of sector and saw a 24% increase in infrastructure revenue to AED 82m
The full set of Interim Results can be found on Financial Results Section of Depa’s website: www.depa.com
For further inquiries, please contact:
Tel: +971 4 224 3800
Brunswick Gulf Ltd
Azadeh Varzi / Jade Mamarbachi
Tel: + 971 4 365 8260
ABOUT DEPA LIMITED
Depa Limited is a leading interior contracting company in the Middle East, North Africa and Southeast Asia regions. Operating principally in the luxury fit-out industry, its main areas of business cover luxury hotels, infrastructure and public sector amenities such as hospitals and airports, high-end residential properties, retail outlets, as well as yachts. Depa is listed on the NASDAQ Dubai (ticker DEPA) and has Global Depositary Receipts on the regulated market for listed securities of the London Stock Exchange plc (ticker DEPA and DEPS).
The range of business activities performed by Depa comprises:
· Interior contracting : which focuses on luxury interior fit-out services, which include installation and finishing of floors, walls, ceilings, fixed joinery, panelling, wood-works, doors and frames;
· Manufacturing : which comprises a network of factories and joineries which produce customized furniture, fixtures and equipment (FF&E);
· Procurement : which involves the procurement of supplies and materials from third parties to support and complement Depa's interior contracting and manufacturing operations as well as third party procurement contracts for specific FF&E projects.
By integrating these services into a single package, Depa provides clients with comprehensive and customized interior contracting solutions.
With more than 8,000 employees worldwide, the company operates through an integrated network of subsidiaries, affiliates and representative offices located in the UAE, Saudi Arabia, Qatar, Egypt, Jordan, Syria, Libya, Morocco, India, Malaysia, Thailand, China, Singapore, UK, the Netherlands, and the United States. Through this network, Depa has successfully executed large and complex projects in over 16 countries including the Burj Al Arab Hotel (Dubai), Emirates Palace (Abu Dhabi), the Museum of Islamic Art (Doha), Four Seasons Hotels (Sharm El Sheikh & Mumbai) and Mazagan Resort (Casablanca).