Drake & Scull Rallies Amid Optimism New CEO May Boost Businessby
Wael Allan, who was chief operating officer, to replace Tabari
DSI advances 12 percent in two days, most since April
Drake & Scull International PJSC, which is expected to post its second straight quarterly loss, advanced in the biggest two-day rally in six months after appointing a new chief executive officer.
The Dubai-based engineering and construction company climbed 4.2 percent on Tuesday to close at 0.494 dirham, bringing its two-day gain to 12 percent. The rally began after Drake & Scull said Wael Allan, the company’s chief operating officer, will replace Khaldoun Tabari as CEO. About 81 million shares were exchanged on Tuesday, more than a third of the DFM General Index’s total volume.
The company began reporting losses last year after the decline in oil prices forced developers and clients to defer payments and delay projects across several markets. Saudi Arabia, which has slowed payments to contractors and suppliers as it battles the widest budget deficit since 1991, accounted for about 20 percent of Drake & Scull’s revenue last quarter. The company’s spokesman didn’t return calls seeking comment.
“Hopefully this management will change something within the company, which is very necessary right now,” said Talal Touqan, the head of research at Abu Dhabi-based Al Ramz Capital LLC, a brokerage and investment bank. Still, Drake & Scull is “facing the same challenges. The whole sector is facing many issues in Saudi Arabia,” he said.
Drake & Scull posted a loss of more than 200 million dirhams ($54 million) in the second quarter. Its shares climbed 19 percent this year, compared with a 7.6 percent advance in Dubai’s main stock gauge.