DUBAI — Dubai-based leading interior contracting company Depa Ltd. expects its net profit for 2009 will rise around 24 per cent to Dh241 million compared to Dh194.5 million in 2008.
The Nasdaq Dubai listed interior designer has executed large and complex projects in over 16 countries. Its major projects in the country include the Burj Al Arab Hotel, Emirates Palace, Dubai Metro and Italian fashion brand Armani’s first hotel in the world located in the world tallest tower Burj Khalifa.
Revenue for 2009 is expected to jump 36 per cent to Dh2.7 billion over Dh1.97 billion in 2008, the company said in a statement. The company said although it achieved strong performance in 2009, it was not immune to the global economic downturn, which impacted the emerging markets in which Depa operates, in particular the hospitality sector.
“Although we are seeing signs of recovery, we believe that 2010 will also be extremely tough and we are further streamlining our business to strengthen our ability to cope with difficult market conditions and further diversifying our revenue base as we have been doing over the last decade,” Depa Limited Chief Executive Officer Mohannad Sweid said.
The company continues to have a healthy contracted backlog, which stood at Dh2.1 billion as of December 31, 2009 compared to Dh2.7 billion by the end of 2008. The UAE accounts for over 55 per cent of all contract volume. The company, which will announce its last year’s final results on March 29, expects 2010 will be a difficult year.
Despite challenging markets, Depa is expecting revenue and profit levels in 2010 to be similar to those of 2009. There are still prestigious contracts to work on and Depa continues to win these projects. In 2009, Depa won contracts to fit out the Dubai Palm Royal Mirage, Conrad Hotel in Dubai and the Ghurair Hotel in Deira, Dubai.
“We have managed to maintain our strong performance, as we anticipated the downturn ahead of time and prepared well for it by managing our cost base efficiently and diversifying our revenues geographically and by sector,” Sweid said.
As with the infrastructure sector, refurbishment is also a countercyclical industry and as such, Depa is closely looking at opportunities to expand its presence in this area. In December, Depa won a refurbishment contract for three hospitals in Doha, Qatar, another key target market, with a total value of Dh67 million.
Prior to contingency, impairment and additional provision adjustments, Depa’s net profits stood at Dh305 million at a 30 per cent growth over 2008’s Dh234 million. These contingencies are not allocated or related to any risk other than the current market.
Closing the year, the company maintained a strong cash position of Dh548.7 million and total debt (short and long term) on the balance sheet reached Dh212.6 million leaving the company in a positive net cash position of approximately Dh336 million.
The company is continuing its acquisition and investment strategy as planned and pursuing strategic expansion opportunities this year.