Loss for Depa despite a backlog of contracts

What's Down: A backlog of contracts worth Dh3.9 billion could not save Depa from reporting a Dh8.7 million loss for the first quarter.

A backlog of contracts worth Dh3.9 billion could not save Depa from reporting a Dh8.7 million loss for the first quarter.

Revenues were up 15 per cent to Dh378m in the first three months of the year, compared to Dhs327.2m recorded during the same period last year.

Despite the net loss and lower sales, the company was upbeat on its prospects because of its growing backlog of contract orders that include the Cleveland Clinic in Abu Dhabi and Mumbai International Airport. Depa also signed a Dh183m contract in the quarter to complete the internal decoration for the Hilton Hotel, part of the King Saud University in Riyadh.

"We continue to sign sizeable contracts with established names across the GCC and in South East Asia and we anticipate increasing our backlog, already at record levels, during the year," said Mohannad Sweid, the chief executive of Depa. "The macro-economic environment has improved considerably and we are witnessing an increase in activities from both public and private sector clients."

The trend is positive as the Dh8.7m loss narrowed on the previous year when the company lost Dh19.3m for the first quarter.

Its fundamentals remain strong with total assets of Dh3.9bn and cash on the balance sheet of Dh389m, which rose Dh74m in the period. Last year, Depa made a net profit of Dh59.1m, reversing a loss of Dh205m in 2010, when it was still recovering from the economic downturn.

"[The] record backlog reflects just under Dh500m of new contracts signed during the first quarter," the company said. Despite the company's record backlog of orders and a strong balance sheet, its shares did not move at all yesterday.

That could be one reason why the company is mulling delisting from the Nasdaq Dubai and instead floating its shares in Singapore or the Dubai Financial Market.

Priced at 45 cents, the shares have failed to reach anywhere near the heady heights of $1.55 that they were listed at in 2008.

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