Drake & Scull cancels 2014 dividend after profit plummets

Dubai-based engineer Drake & Scull has announced that it will not issue a 2014 dividend after the company’s profit fell to $27m in 2014 compared with $45m the year before. The company last paid a cash dividend in 2011. 

The news comes two weeks after it was announced that managing director Saleh Muradweij will leave his post, although he will remain on the board of directors. 

A report on the company’s "flat" 2014 fiscal year noted that work awarded to the company was mostly from Saudi Arabia or the United Arab Emirates. Some 43% of its work came from the former country and 26% from the latter. 

Khaldoun Tabari, the chief executive of Drake & Scull, said in a statement that the company’s performance in 2014 had "experienced unforeseen global economic challenges, and uneven geopolitical developments had a far reaching effect". 

He said: "From a corporate perspective, we experienced considerable delays in our operations, particularly in our biggest market, Saudi Arabia, which had a significant impression on our top line target for the year." 

Mukhtar Safi, Drake & Scull’s chief finance officer, said: "We aim to complete the integration of our delivery systems and operations to reduce our operational costs and overheads and improve our margins.  

"We will be cautious in managing the growth of our backlog and concentrate on improving the strength of our working capital, which will boost our project delivery capabilities." 

Drake & Scull were awarded high-profile contracts in Saudi Arabia, UAE and Egypt last year.

Image: Khaldoun Tabari, Drake & Scull’s chief executive