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Omani contractor Galfar’s Q1 profit down on weak revenues

MUSCAT, May 25, 2019

Oman's Galfar Engineering & Contracting Company said its consolidated net profit fell to RO465,000 ($1.2 million) during the first quarter from RO1.448 million ($3.75 million) recorded for the same period last year.
 
This was mainly because of the lower revenues recorded by the company owing to the payment delays on certain projects in the sultanate, said the company in a statement.
 
Galfar’s revenue dropped by more than eight per cent to RO64.18 million in the first quarter compared to RO70.19 million in the same period of last year.
 
The company has overdue receivables of more than RO40 million as of date from the government and its related entities, it stated. 
 
"The delay in receiving the overdue receivable has caused a strain on our cash flow, which resulted in suboptimal execution of certain projects and delay in completion of certain projects. As a result, revenue was lower than planned and lower than the same period in 2018," said the company in its statement to the Muscat Securities Market (MSM).  
 
The company said its board and management continue to explore opportunities to reduce operating expenses and maintain competitiveness to improve the company’s financial position.
 
Galfar said the net profit of its subsidiaries in Oman increased from RO252,000 in Q1, 2018 to RO349,000 in Q1 2019.  The associate in Kuwait made a contribution of RO112,000 to Group’s profit in Q1 2019 as against RO96,000 for last year.
 
The consolidated financial statement includes losses on account of discontinued operation of Indian subsidiaries and associates totaling to RO0.950 million, as against a loss of RO1.9 million in Q1 2018, it stated.
 
During the period from January 1 to May 20, the Omani group received new orders worth RO117 million. These include construction of water network at Wilayat Al Hamra worth RO27 million and dualisation of Al Rusail-Nizwa road worth RO86 million, said the statement.   
 
The order book as of date is around RO434 million, it added.
 
On the future outlook, Galfar said: "Going forward, we expect to maintain a solid work pipeline with a significant number of tenders under evaluation across a diverse array of sectors and clients."
 
"We reasonably expect to be successful in a number of those which will ensure stability and sustainability of our strong market position," it added.
 
During the period, Galfar also established a 100 per cent subsidiary company in Kuwait and began bidding for government tenders.-TradeArabia News Service



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