Contractor Drake & Scull International (DSI) posted a loss of Dh722.5 million in the first quarter as it made provisions against contract sums owed from customers.
The company wrote down Dh572m in amounts due from customers on contract balances. It also declared a 23 per cent decline in year-on-year revenue during the period to Dh796m.
The loss declared for the quarter “looks like a back-calculation” said Nishit Lakhotia, the head of research at Bahrain-based Securities & Investment Company, allowing it to meet its latest capital restructuring plan.
The company had initially planned to cut the amount of shares it has in circulation by half, which was equal to about 115 per cent of its accumulated losses of about Dh992m by the end of 2016. The deal also involved Tabarak Investment injecting Dh500m of equity into the company, allowing it to buy 1.16bn shares at a discounted price of 43 fils per share, giving it a majority stake.
However, this proposal was rejected initially by the regulator, the Securities and Commodities Authority, which forbade DSI from cancelling shares above the value of its accumulated losses.
Moreover, at its annual general meeting held this month, shareholders also voted down the plan to let Tabarak Investment subscribe at a discount.
A rejigged structure involves Tabarak Investment instead buying Dh500m worth of shares at par value following a much greater reduction in the company’s share base – it is proposed that more than 1.7 billion shares are cancelled, leaving 580 million in circulation before Tabarak’s investment (giving it a 47 per cent stake).
The Dh722m loss for the first quarter brings the firm’s accumulated losses to more than Dh1.71 billion – exactly the level of losses required to cancel 75 per cent of its shares.
“The regulator will only allow you to only reduce your capital up to your accumulated losses. So they have added another Dh722m to their losses so they can reduce shares by 75 per cent and totally wipe out their accumulated loss before they get the new strategic investor into the company,” Mr Lakhotia explained.
“There is a regular net loss of about Dh140m that they would have made without this extraordinary provision.”
DSI was unavailable for comment yesterday, but in a statement accompanying its first quarter trading figures the company’s chief executive, Wael Allan, said the firm was “confident that the completion of the capital restructuring programme will enable us to stabilise the business and help to resolve our financial challenges”.
“We are undertaking several strategic measures to improve our operations, control costs and eliminate inefficiencies affecting our business across all operating segments,” he said.
Although the recapitalisation would be dilutive for shareholders, it may be necessary.
The first quarter accounts for DSI were accompanied with a note from auditors PwC, which stated that its current liabilities exceed its assets by Dh856m and that it has a negative cash balance of Dh278m, indicating a “material uncertainty exists that may cast significant doubt on the group’s ability to continue as a going concern”.
Mr Lakhotia said the Dh500m of new money from Tabarak “is positive but is not that significant” in terms of DSI’s turnaround.
“What is going to change the fortunes of the company is its ability to recover the amounts that is due to it.”
The company is owed as much as Dh2bn by Saudi Aramco for work at the King Abdullah Petroleum Studies and Research Centre, which it completed in 2012, Mr Allan had told The National last month.
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Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
The specs
Engine: 4.0-litre V8
Power: 503hp at 6,000rpm
Torque: 685Nm at 2,000rpm
Transmission: 8-speed auto
Price: from Dh850,000
On sale: now
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Normcore explained
Something of a fashion anomaly, normcore is essentially a celebration of the unremarkable. The term was first popularised by an article in New York magazine in 2014 and has been dubbed “ugly”, “bland’ and "anti-style" by fashion writers. It’s hallmarks are comfort, a lack of pretentiousness and neutrality – it is a trend for those who would rather not stand out from the crowd. For the most part, the style is unisex, favouring loose silhouettes, thrift-shop threads, baseball caps and boyish trainers. It is important to note that normcore is not synonymous with cheapness or low quality; there are high-fashion brands, including Parisian label Vetements, that specialise in this style. Embraced by fashion-forward street-style stars around the globe, it’s uptake in the UAE has been relatively slow.
Meydan racecard:
6.30pm: Al Maktoum Challenge Round 2 (PA) Group 1 | US$75,000 (Dirt) | 2,200 metres
7.05pm: UAE 1000 Guineas (TB) Listed | $250,000 (D) | 1,600m
7.40pm: Meydan Classic Trial (TB) Conditions | $100,000 (Turf) | 1,400m
8.15pm: Al Shindagha Sprint (TB) Group 3 | $200,000 (D) | 1,200m
8.50pm: Handicap (TB) | $175,000 (D) | 1,600m
9.25pm: Handicap (TB) | $175,000 (T) | 2,000m
10pm: Handicap (TB) | $135,000 (T) | 1,600m
2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, Leon.
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
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Mobile phone packages comparison
A State of Passion
Directors: Carol Mansour and Muna Khalidi
Stars: Dr Ghassan Abu-Sittah
Rating: 4/5
Ms Yang's top tips for parents new to the UAE
- Join parent networks
- Look beyond school fees
- Keep an open mind
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
THE SPECS
Engine: 6.75-litre twin-turbocharged V12 petrol engine
Power: 420kW
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Transmission: 8-speed automatic
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Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
Our legal columnist
Name: Yousef Al Bahar
Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
A timeline of the Historical Dictionary of the Arabic Language
- 2018: Formal work begins
- November 2021: First 17 volumes launched
- November 2022: Additional 19 volumes released
- October 2023: Another 31 volumes released
- November 2024: All 127 volumes completed
The Baghdad Clock
Shahad Al Rawi, Oneworld
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If you go
The flights
Emirates flies from Dubai to Funchal via Lisbon, with a connecting flight with Air Portugal. Economy class returns cost from Dh3,845 return including taxes.
The trip
The WalkMe app can be downloaded from the usual sources. If you don’t fancy doing the trip yourself, then Explore offers an eight-day levada trails tour from Dh3,050, not including flights.
The hotel
There isn’t another hotel anywhere in Madeira that matches the history and luxury of the Belmond Reid's Palace in Funchal. Doubles from Dh1,400 per night including taxes.
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