Depa first quarter 2011 trading statement

Dubai, UAE; 4 May 2011: Depa Limited (ticker DEPA) (‘Depa’ or the ‘Company’), one of world’s leading interior contracting companies, today issued a first quarter trading update for the period ended 31 March 2011.

The first three months of 2011 has seen Depa perform well, given the difficult trading environment. The Company’s high-quality backlog of new contracts increased to 2.3 billion as of end of March, up from AED2.2 billion at the end of 2010. In 2010, Depa's management increased efforts to ensure that new additions to the backlog were of high quality. This policy was carried into 2011 and Depa continued to be selective about clients, funding structure of projects it undertook, and other risk-related criteria. This strategic decision has lead to an improvement on quality as well as cash collection, receivables and project margin on current and future projects, which has had an impact on 2010 financial results, and will continue to improve future company financials. 

Commenting on the period, Mr. Mohannad Sweid, CEO of Depa, said: “We have made a solid start to 2011, consolidating our market leading position, and we are seeing signs of a return to more normal levels of quarterly revenues. We are emerging from our ‘recession year’ and are busy tendering for a large number of new contracts across the hospitality and infrastructure sectors. Today we are stronger and better positioned and expect 2011 to be an improved year where we return to profit levels within similar ranges to those prior to 2010.”

Diversification by geography and market sector remains central to Depa’s long held strategy. Over the period, Depa has signed a number of contracts which further reduce the Company’s dependence on any one country or market segment. For the period 1 January 2011 – 30 April 2011, Depa has been awarded new contracts worth over AED500 million.

Depa grew its presence in the Azerbaijan market in Q1 2011; signing a number of new contracts, including a AED121 million contract for the interior fit-out of the Baku Flame Towers project. The Flame Towers development will feature three high-rise buildings including the hotel, residential and office facilities ranging in height from 34 to 39 stories. The other contracts include the fit out of the new JW Marriott Hotel in Baku, worth AED41 million, and the Port Baku Towers Project, worth AED27million.

Meanwhile, Depa’s luxury yacht subsidiary, Vedder, has secured three new contracts in Germany and Austria, totalling AED42 million. These contracts have affirmed Depa’s position as one of the largest and leading yacht interior specialists in the world.

Elsewhere, Depa has successfully built on its position in the United Kingdom through a £2 million (AED12 million) furniture, fixtures & equipment (FF&E) contract for all 45-rooms and suites and the public areas at the 5* Raithwaite Hall Country Retreat in Yorkshire. Depa Group has previously worked on London-based hotel projects such as Grosvenor House, Four Seasons Canary Wharf, Le Méridien Waldorf and The Savoy.

In Depa’s home market of Dubai, the first quarter of this year has seen Depa sign a AED59 million contract for the fit out and FF&E for the Fairmont Palm Hotel & Resort. The five-star beachfront hotel is comprised of 381 rooms and suits, and is located on Dubai’s Palm Jumeirah development.

Top Backlog Projects List

The below table represents the top 90% of Depa’s total backlog

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ABOUT DEPA LIMITED

Depa Limited is a leading interior contracting company in the Middle East, North Africa and Southeast Asia regions. Operating principally in the luxury fit-out industry, its main areas of business cover luxury hotels, infrastructure and public sector amenities such as hospitals and airports, high-end residential properties, retail outlets, as well as yachts. Depa is listed on the NASDAQ Dubai (ticker DEPA) and has Global Depositary Receipts on the regulated market for listed securities of the London Stock Exchange plc (ticker DEPA and DEPS).

The range of business activities performed by Depa comprises:

• Interior contracting : which focuses on luxury interior fit-out services, which include installation and finishing of floors, walls, ceilings, fixed joinery, panelling, wood-works, doors and frames;
• Manufacturing : which comprises a network of factories and joineries which produce customized furniture, fixtures and equipment (FF&E);
• Procurement : which involves the procurement of supplies and materials from third parties to support and complement Depa's interior contracting and manufacturing operations as well as third party procurement contracts for specific FF&E projects.

By integrating these services into a single package, Depa provides clients with comprehensive and customized interior contracting solutions.

With more than 8,000 employees worldwide, the company operates through an integrated network of subsidiaries, affiliates and representative offices located in the UAE, Saudi Arabia, Qatar, Egypt, Jordan, Syria, Libya, Morocco, India, Malaysia, Thailand, China, Singapore, UK, the Netherlands, and the United States. Through this network, Depa has successfully executed large and complex projects in over 16 countries including the Burj Al Arab Hotel (Dubai), Emirates Palace (Abu Dhabi), the Museum of Islamic Art (Doha), Four Seasons Hotels (Sharm El Sheikh & Mumbai) and Mazagan Resort (Casablanca).