Contractor DSI swings to profit but auditor highlights $1.3bn in accumulated losses

Auditor EY said that accumulated losses at contractor Drake and Scull International had reached $1.3 billion. (Reuters)
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Updated 01 April 2021

Contractor DSI swings to profit but auditor highlights $1.3bn in accumulated losses

  • Contractor looks to restructure debts
  • Construction hit hard by slowdown

DUBAI: Contractor Drake & Scull said it swung to a profit of 95 million dirhams ($25.9 million) last year after losing 87 million dirhams the year before.
But auditor EY highlighted the UAE-based company’s accumulated losses of 4.9 billion dirhams ($1.3 billion), liabilities that exceeded assets by 4.1 billion dirhams and negative cash flow in 2020 of 104 million dirhams.
These figures “cast significant doubt about the Group’s ability to continue as a going concern,” EY said in a statement accompanying the earnings, which were released to the Dubai Financial Market on Thursday.
EY also raised a number of issues with Drake & Scull’s accounts, including being unable to determine opening balances for the beginning of 2020 after refusing to sign off on its 2019 accounts due to “significant and pervasive” audit issues.
“Looking ahead, our main focus will be to restructure our debt and equity for which a comprehensive plan is in progress,” the company said in a statement accompanying the results.
Drake & Scull presented a restructuring plan to creditors at the beginning of March and will hold a vote on its implementation at the end of April.


Lucid is ‘key step’ in PIF’s strategy after market debut

Updated 10 min 23 sec ago

Lucid is ‘key step’ in PIF’s strategy after market debut

  • PIF is believed to hold more than 60 percent of the stock after its 2018 cash injection into the start-up, giving it a paper profit of at least $15 billion

DUBAI: Saudi Arabia’s Public Investment Fund (PIF) has already made billions of dollars in profit on its investment in Lucid Motors, the California upmarket electric vehicle (EV) manufacturer, and could earn many billions more over the next five years.

PIF announced its first investment of SR3.75 billion ($1 billion) in Lucid in September 2018.

The sovereign wealth fund congratulated Lucid on its market debut and said on Twitter: “Our investment in Lucid Motors and the production of Lucid Air is a key step in the strategy for long term growth opportunities, supporting innovation and technology development, and doing revenue and sectoral diversification in Saudi Arabia.” Shares in Lucid raced to an 11 percent premium on the opening day of trading on New York’s Nasdaq Global Select Market on Monday, valuing it at more than $24 billion.  

PIF is believed to hold more than 60 percent of the stock after its 2018 cash injection into the start-up, giving it a paper profit of at least $15 billion.

This could go significantly higher if Lucid follows the model of rival EV maker Tesla. Elon Musk’s high-flying company reported better than forecast profits earlier this week, and saw its share price leap 2 percent, giving it a market value of $633 billion.

Lucid is at a much earlier stage of the EV road, but projections made by its management foresee a big rise in sales and profits ahead.

The company sees revenues of $2.2 billion next year after it has begun selling cars in substantial numbers, rising to $22.8 billion in 2026. By then, it will be selling 250,000 cars a year, making a profit of nearly $3 billion and generating free cash of $1.5 billion, according to the forecasts.

Peter Rawlinson, CEO and CTO of Lucid Group, who was a former chief engineer at Tesla, said that the company was “on track” to meet its projections after the Nasdaq debut.

“Lucid Air (the launch model) represents the next generation of electric vehicles and creates new standards for interior comfort, range, efficiency, and power,” Rawlinson said. 

“We are on track to meet our projected deliveries for the next two years, and we look forward to delighting our customers around the world with the best electric vehicles ever created.”

Lucid is likely to face more intense competition in the EV space than Tesla did when it launched its first model more than a decade ago, with other “legacy” manufacturers across the world launching electric products.

But Rawlinson is confident that superior design will give it an edge in the premium market segment. 

“We have got the best car in the world,” he told Arab News earlier this year.

Success for Lucid will be a big boost for PIF’s investment strategy, but it could also have significant industrial and commercial implications for the Kingdom. Lucid is likely to open a showroom in Saudi Arabia and there has been intensifying speculation that it will eventually build a production plant in the Kingdom, too.

Rawlinson said of PIF: “They put their faith in us, that is why we are here today thriving.”


Amazon denies plans to accept bitcoin payments

Updated 50 min 11 sec ago

Amazon denies plans to accept bitcoin payments

  • The electric carmaker’s balance sheet for the second quarter of 2021 showed a net digital asset value of $1.311 billion as of June 30

RIYADH: Bitcoin traded higher on Tuesday, rising 0.55 percent to $38,379.02 at 5:02 p.m. Riyadh time. Ether, the second most traded cryptocurrency, was down 1.3 percent to $2,298.85, according to data from CoinDesk.

Below is the latest cryptocurrency news:

Amazon has denied a British newspaper report that it plans to accept bitcoin payments this year. “Notwithstanding our interest in the space, the speculation that has ensued around our specific plans for cryptocurrencies is not true,” an Amazon spokesperson said on Monday. “We remain focused on exploring what this could look like for customers shopping on Amazon.”

According to a report from Bloomberg, the popular stablecoin Tether is under criminal investigation by the US Justice Department. Prosecutors are looking into whether Tether’s executives committed bank fraud, a development with potentially seismic consequences for the broader crypto market. Tether released a statement saying that the Bloomberg report follows a pattern of repackaging old claims as news, but did not deny awareness of the pending charges, according to CoinDesk.

Goldman Sachs is liquidating and settling cryptocurrency traded products for some of its hedge fund clients in Europe, it was reported last week. The investment banking giant has submitted an application to the US Securities and Exchange Commission for an exchange-traded fund (ETF) that would showcase public companies in decentralized finance and blockchain around the world. The filing indicated that the fund plans to invest at least 80 percent of its assets in companies that are developing blockchain technology and digitizing funding. The Securities and Exchange Commission is currently reviewing more than a dozen Bitcoin ETF applications and has approved decisions on several of them, CoinDesk reported.

Tesla released its second quarter earnings report on Monday. The electric carmaker’s balance sheet for the second quarter of 2021 showed a net digital asset value of $1.311 billion as of June 30. It also showed that Tesla owns $1.311 billion in bitcoin. The company did not buy or sell any bitcoin during the second quarter, but it did report a bitcoin depreciation of $23 million. Tesla’s action reaffirms Musk’s prior statement that neither he nor Tesla had sold their coins, according to Bitcoin News.

A survey conducted by the cryptocurrency exchange of the Independent Reserve Asia Pacific found that 43 percent of respondents said they own cryptocurrency, while 46 percent plan to purchase digital assets in the next 12 months.

The survey of 1,000 Singaporeans from a representative background of gender, age and location, also found that two-thirds of respondents in the 26-45 age group said they own cryptocurrency. Nearly 40 percent of respondents described bitcoin as an investment asset and 25 percent described it as a store of value. Three-quarters of respondents aged between 26 and 35 said they believe that cryptocurrency will become more widely accepted. Singapore’s financial authorities have confirmed that they are working with their French counterparts to explore cross-border applications of central bank digital currencies, according to a report by Cointelegraph.


Amazon to rebrand Souq.com Egypt site this year

Updated 27 July 2021

Amazon to rebrand Souq.com Egypt site this year

  • Souq.com sellers in Egypt encouraged to set up on Amazon.eg

CAIRO: Amazon said it plans to rebrand the Egyptian version of Souq.com as Amazon.eg this year, following similar moves in Saudi Arabia and the UAE.

Sales partners previously registered on Amazon’s Souq.com affiliate can access their accounts through the Amazon Seller Center in preparation for selling their products on the Amazon Egypt website immediately after its launch.

Amazon acquired Middle East etailer Souq.com in 2017 from Syrian entrepreneur Ronaldo Mouchawar.

On May 1, 2019, Souq.com UAE became known as Amazon.ae. On June 17 last year, Amazon launched its dedicated Saudi website Amazon.sa, rebranding the old Souq.com website.

Amazon announced plans in March to hire 1,500 new employees in Saudi Arabia and add 11 buildings to its network. The expansion will boost storage capacity in the Kingdom by 89 percent and its geographical delivery network by 58 percent.

The company operates an extensive logistics network and local operations across Egypt, which includes the main warehouse supported by 15 delivery stations across the country.


Sawiris launches billion-dollar gold mining investment fund

Updated 34 min 33 sec ago

Sawiris launches billion-dollar gold mining investment fund

  • The company said the fund will manage assets worth more than $1.4 billion and is studying new opportunities

CAIRO: La Mancha Holding S.a.r.l, owned by the Sawiris family, has announced the creation of La Mancha Fund SCSp, a Luxembourg-based billiom-dollar investment fund primarily focused on gold mining.

The company said the fund will manage assets worth more than $1.4 billion and is studying new opportunities.

The company indicated that the first closure of the fund was completed with the receipt of all the gold mining assets of La Mancha, in addition to an investment of $100 million from a partner who will invest alongside the Sawiris family.

The fund will be available to other investors at a later time.

“The step to establish an investment fund is the result of what we have been doing since 2015 when we sold our operating assets to Endeavour Mining in exchange for capital shares ... We anticipate many opportunities in the gold mining sector, which is still fragmented and needs more consolidation,” Naguib Sawiris, chairman of the board of directors of La Mancha, said.

“The fund ... will include a number of well-known personalities in the mining sector, many of whom have a long history of working with and providing advisory services to La Mancha,” he added.

“The fund’s primary investment objective is to create investment resources for the gold and precious metals mining sector. It will also have the flexibility to invest in electric car battery metals. It will invest primarily in a specific portfolio focused on long-term listed stocks, but it may consider investing a smaller portion of its assets are in private equity,” Sawiris said.

He said the fund will seek to acquire large stakes in small and startup mineral resource companies with strong management and geological capabilities that will enable them to create value within three to five years.

The strategy plans to unlock organic growth opportunities, launch value creation opportunities by developing long-term exploration plans, develop assets, and establish new mines and increase factory productivity.

The strategy includes enhancing and supporting accumulated external growth opportunities through acquisitions, regional mergers and exploring mergers with larger players.

One of the fund’s objectives is for its management to seek to improve environmental, social and governance standards within its portfolio companies during the investment period.


Saudi Central Bank steps up efforts to increase locals in financial sector

Updated 27 July 2021

Saudi Central Bank steps up efforts to increase locals in financial sector

  • SAMA working with Ministry of Human Resources and Social Development and Human Resources Development Fund
  • Initiative could create 200,000 jobs - economist

RIYADH: The Saudi Central Bank (SAMA) has signed an agreement with other government entities to increase the number of locals in the financial sector, a move that might lead to the creation of more than 200,000 jobs for nationals.

SAMA signed a memorandum of understanding (MoU) with the Ministry of Human Resources and Social Development (HRSD), in partnership with the Human Resources Development Fund (Hadaf), SPA reported on Monday.

“This MoU aims to increase localization, provide human competencies capable of meeting the requirements of the financial sector, and create more than 203,000 jobs in the sector,” independent economist Fadhel Al Buainain told Arab News.

The measures will establish sustainable strategic steps to ensure the creation of more jobs and prepare young people to fill them, he said.

For decades, the Saudi financial sector was made up only of banks, but since the entry of new financial entities such as investment institutions, financial companies and the insurance sector, localization of jobs has become more important, to achieve sufficiency, strategic security and address unemployment, said Al Buainain.

Supporting specialized financial colleges and creating a college for banking sciences are among the tools that will help achieve the sector’s localization goals, he said.

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