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Drake & Scull fires CEO and reduces Q2 losses by 12% to Dh199 million

Drake & Scull International, the Dubai-based mechanical, electrical and plumbing (MEP) contractor, has fired its Chief Executive Office Wael Allan while reporting a 12 per cent reduction in net losses to Dh199 million in the second quarter of 2017, down from Dh226 million recorded in the second quarter of 2016, as the Tabarak Holdings take control with a bail-out package to rescue the troubled company.

“The group’s Board in its meeting to review and approve the financial results, also resolved to terminate the services of the CEO Wael Allan. The board also approved the resignations of several Board members including that of former Exeutive Vice Chairman Khaldoun Al Tabari,” a company statement said.

Tabarak Investment, which threw a Dh500 million lifeline to rescue the company, reaffirmed its commitment, acquires majority stake from former CEO Khaldoun Rashid Tabari and extends an interest-free ‘Qard Hasan’ loan of up to Dh100 million to the Group.

The company also reported an 18.11 per cent decline in revenues to Dh660 million in the second quarter of 2017, down from Dh806 million recorded for the same period last year. The revenue achieved for the quarter is consistent with the parameters of the financial targets set forth by the Group at the outset of the fiscal year and is reflective of a sustained performance in key markets mainly the UAE.

The company’s total order backlog stands at Dh6.6 billion as of 30th June 2017 mainly in the MEP sector.

The group advanced with the disposal of its non-core assets and has also finalized negotiations for the release of the remaining funds from the sale of its One Palm investment in Dubai in Q3 2017. The funds along with the fresh equity infusion from Tabarak Investment will help restore the liquidity of the group, enabling DSI to successfully execute its projects backlog and improve productivity across all operating segments. 

Feras Kalthoum, Acting CFO, Drake & Scull International, said:  “The results of the quarter should be viewed within the context of our turnaround plan and the capital restructuring program and are consistent with our financial targets set out at the outset of the fiscal year. Our efforts to complete the Capital and Debt Restructuring of the Group coupled with continued balancing of our portfolio to mitigate any contingent exposure that may impact our future profitability will soon reflect positively on our financial performance and top line targets.”

Mohammed Atatreh, Board Member, Drake & Scull International PJSC, added: “The year 2017 will continue to be a transitional year for DSI as we proceed with the execution of our turnaround plan. Our efforts to streamline our operations and restore our financial position will enable us to set solid foundation for sustainable growth. The continued support of Tabarak Investment has enabled us to maintain good progress year to date, keeping us on track to set up the Group for growth in 2018 and beyond. We look forward to shifting our focus on aggressively delivering and growing our order pipeline and invigorating our industry leadership.”