Sunday, August 29, 2010

DEPA 1H10 Loss: The AED185 Million Burj Al Khalifah Claim

If you've seen DEPA's 1H10 financials, you know they declared a loss of some AED117.5 million of which AED103.7 million is attributable to the shareholders of DEPA.  The firm bills itself as the third largest interior contractor in the world.

You've also seen their earnings press release that this loss relates to expenses incurred on a contract at Burj al Khalifah (but not with Emaar the project developer).  Apparently, a large portion is for overhead expenses incurred over a couple of years.  As per the press release, were the claim paid, DEPA's 1H10 results would have been a net profit of AED81 million, making the size of the claim AED185 million.

That seems a rather large amount.  Unclear what this represents as a percentage of total project cost.  And what the likelihood of getting the full amount is.  As well as the identity of the project owner (obligor).

Perhaps, The Real Nick can weigh in with an observation.  And certainly anyone else out there with something to contribute is welcome as well.

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