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DESIGN UPDATEDepa posts$54m loss last yearTHE COMPANY HOPES TO RETURN TO STRONGPROFIT LEVELS IN 2011 AFTER 2010 SLUMPUAE: Interior contractors Depa,which specialises in luxury hotels,yachts and apartments, posteda $54m loss last year, claiming itwas “the most difcult year in thecompany’s history”.The majority of losses came fromwriting down the value of a contractto construct the interiors of theBurj Khalifa. The company is alsoin a dispute over variations madeto its order and delays, but did notdisclose the name of the companyin question. Revenues fell by 32.5%to $490m for the year, compared to2009. This, they said, was ‘primarilydue to a drop in construction-relatedactivities in the UAE and someother countries across the region’.Contract prot margins fell to 6.3%from 16% in 2009.“Last year was Depa’s ‘recessionyear’. The company operates in thelast leg of the construction cycleand lags the peaks and troughsof other contractors by an averageof 18 months, resulting in 2010’sdifcult operating environment,”said Mohannad Sweid, CEO, Depa.“This followed a compound annualrevenue growth rate over four yearsof 75.5%. We expect prots in 2011and 2012 to be stronger.”According to Sweid, although2010 was a challenging year, itused the time to focus internallyto streamline the business andrestructure the company.Depa has a number of projectsin the pipeline, including theIntercontinental Hotel in Angola,the Conrad Hotel in Dubai, the IPICHeadquarters in Abu Dhabi andDoha City Centre.“Depa has a very strong backlogof projects, which currently standsat over $600 million,” he added.The company expanded into Malaysia,Azerbaijan, Thailand, Syriaand Yemen last year to diversify itsincome sources. It acquired Dubaistone producer Carrara and Singaporefurniture maker Design Studio.The latter is Depa’s main entry intothe Chinese market.It won major contracts in theregion last year, such as a $19.6mdeal in Syria for furnishing theYasmeen Rotana Hotel in Damascusand a $28.3m deal for the InternationalPetroleum Investment Companyheadquarters in Abu Dhabi.“In the short-term, we expectgrowth to come from the GCC andAsia, particularly following theacquisition of Design Studio. In themedium-term, the Asian and GCCinterior contracting market is expectedto keep growing, in part dueto Qatar’s successful bid to host the2022 FIFA World Cup. In the longterm,we feel that selected Africanmarkets will also grow, as well asCentral Asia and certain Europeantarget markets,” added Sweid.The company recently identiedseveral opportunities in the Europeanmarket including a £2 millionfurniture, xtures & equipment contractfor the Raithwaite Hall CountryRetreat in Yorkshire, UK, which willgive the rm a footing in the widerUK FF&E market.“As we identify new markets inwhich to operate, we have foundthat we are often in the strongestposition if we execute as much aspossible off-site, in Dubai, and thenship the items required on the project.This has allowed us to successfullyexecute a number of projectsaround the world which many of ourcompetitors would not have beenable to take on,” he added.14 MAY 2011 | Commercial Interior Designwww.constructionweekonline.com