Drake & Scull International (DSI) reported its financial results for 1Q16. On a positive note, gross profit margin was decent at 7.2%, driven by its engineering business. EBITDA was in the black, at AED29.5mn. Net income was AED9.8mn (-61% Y-o-Y, +105% Q-o-Q, -51% vs. EFGe). Net income was helped by AED14.3mn in other income (1Q15: AED7mn), possibly on legal settlements or sale of equipment, excluding which, net income would have been in the red. Revenue was weak (-7% Y-o-Y, -25% Q-o-Q), coming in at AED1.03bn, albeit in line with our estimate of AED1.02bn. Receivable collection issues continued, which we attribute to the company’s high exposure to the Saudi market. Bank borrowings continue to rise, with its net-debt-to-equity inching up to 0.95x, 0.91x in December 2015. DSI signed one contract in 1Q16, namely the AED343mn contract for Doha Metro. (Company disclosure, Mai Attia, Sara Boutros)