What new initiatives is Drake & Scull involved in within the region?
MURADWEIJ: As you know, Drake & Scull is expanding exponentially in many areas in the region. We have moved from being a local contractor in the UAE to being an international contractor. We now exist in all of the GCC, we have moved into North Africa, we have offices in Algeria, we have existed in Libya before the crisis and now we are ready to move back into Libya. We have offices in Asia; we have operations in Thailand, and India, and we are looking forward to getting projects in Vietnam. We are quite diversified; we have concentrated on our business streams in main contracting as opposed to sub-contracting. Drake & Scull used to be an electro-mechanical specialized sub-contractor. By introducing the two business streams - infrastructure, water and power; and construction - we tried to move away from sub-contracting with the intention of having more control of our destiny as a main contractor. We are trying to get all of the business streams working within our control.
Where do you think the most growth is going to come from within this region?
MURADWEIJ: I think Saudi is a major player in growth for the next 4-5 years. Qatar also will bring a lot of growth very soon. We started our civil operation in Qatar last quarter and we are already getting a lot of enquiries for jobs there. I think it is a little bit slow now because of the planning stage that they are in, but coming the 2nd or 3rd quarter of 2012, I think there is no option but to launch these projects in order to meet the deadlines that they have set. So I think Qatar and Saudi Arabia will be the engines of growth in this region.
Where is most of your work in the UAE coming from?
MURADWEIJ: Most of our work here is coming from Abu Dhabi, although some is coming from Dubai. We are getting new jobs in Dubai, but more creative structures than the traditional structures of contracting. This means you create a structure where we are involved not only in the contracting side, but also in the equity side of the project.
How successful was the Drake & Scull IPO?
MURADWEIJ: The IPO at the time was one of the most successful IPOs in the region. It was 101 times oversubscribed. The timing was perfect because afterward the crisis started. We gathered capital to enable our growth mission, which has come to fruition in the past 3 years. We have a strong balance sheet, in both the top line and the bottom line, and we have great liquidity, which enables us to do whatever we have in our vision and mission. This also attracts other developers and partners to come in and work with us because of that financial strength.
Do you see the current share price as fair and representative?
MURADWEIJ: I do not think any of the share prices in the region are fair or indicative of the performance of the companies. I think right now we are not looking at the share price as much as we are looking at the performance and growth of the company. Ultimately, the share price will correct itself according to the performance. If you look at our results in the 3rd quarter, which was posted in November, we had $834m top line and $55m in the bottom line equaling a 7% net margin. In the conditions that we are in right now, those are great results for a contracting company. If you compare it with our 2010 results, we are 80% higher than last year. In any normal or healthy market, just posting those kinds of results would show growth in the share price.
I think Saudi is a major player in growth for the next 4-5 years. Qatar also will bring a lot of growth very soon.
What is your general economic outlook for the UAE?
MURADWEIJ: I think the UAE is solid. I do not have any fears about its economy in the long run. I think it will be challenging in the next couple of years until it gets itself together and reorganizes its plans going forward. The UAE has been and will be our base going forward. Our headquarters are here, our shared services and support are here, and I think there is no other place to be than the UAE to operate outside in the international world. The UAE provides the basic requirements for any contractor to succeed. Whether they succeed or not, it is only their fault. The basic requirements, which are visas, resources, infrastructure, financial services, and camps for employees, everything is there for you. Dubai coped with the growth over the last 5 or 6 years in providing the services needed and hence the exponential growth for some of the contracting companies. If you take these companies with the strength that they have now into other regions and take away their manpower because they cannot bring their manpower because there are no visas - you cannot bring in management except for visit visas, you cannot accommodate them in conditions they are comfortable with - then they are limited with what they can do. It is a privilege what the UAE has been and what the UAE can still facilitate for any contractor.