Depa reports 69% drop in net income despite revenue growth

Depa, the Dubai-based interior contractor that fitted out the world’s tallest building Burj Khalifa, recorded a 69 per cent year-on-year slide in its 2018 first-quarter net profit, but said its outlook is positive for the reminder of the year.

Depa’s group net income after non-controlling interests slumped to Dh7.2 million for three months to end of March, from Dh23.5m reported a year earlier, the company said in a statement to Nasdaq Dubai, where its shares are traded. The fit-out firm said its 2017 first-quarter net profit includes the resolution of a major long-outstanding receivable, which positively impacted earnings.

Revenues for the period climbed 11 per cent year-on-year to Dh409m in the period. Depa Group’s net cash, excluding restricted cash, rose 22 per cent from the year earlier period to Dh230.

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“Depa has made a strong start to 2018. With our strategic agenda set, the group is focused on achieving its objectives of delivering consistent sustainable top and bottom line growth, cash-backed profit and long-term shareholder value creation,” Hamish Tyrwhitt, Depa’s group chief executive said in the statement.

“The outlook for the group remains positive with opportunities to grow our key business units across our addressable markets.”

Like other regional contracting firms Depa has struggled to maintain growth amid softer economic conditions on the back of a three-year oil slump. It turned a corner last year with 2017 full-year net profit rising 200 per cent as it managed to recover long-outstanding receivables. It’s nine-month profit soared four-folds while its first half 2017 net income more than quadrupled.

On Wednesday Depa said its backlog of projects grew 6 per cent from last year to Dh1.89 billion as the outlook for the group’s business remains positive across its addressable markets.