Saudi Arabian contractor Abdullah Abdul Mohsin Al Khodari and Sons reported a 70.6 per cent drop in first-quarter net profit on Tuesday as it continued to struggle amid a slowdown in the kingdom's construction sector.

The company made a profit of SR4.11 million ($1.10 million) in the three months to March 31, down from SR13.98 million ($3.72 million) in the year-earlier period, according to a statement to Riyadh's bourse.

The firm cited a 16.4 per cent drop in revenue for the profit decline as well as a fall in its gross margin, which was impacted by the higher costs of completing projects.

EFG Hermes had forecast the builder would make a first quarter net loss of SR6.25 million ($1.66 million).

The company, like many construction-related firms, has been put under pressure by a slowdown in the sector, caused by cutbacks in state spending due to lower oil prices.

Khodari won SR16.2 million ($4.3 million) of new contract awards in the first quarter, down from SR1.1 billion ($293 million) in the corresponding period of 2015. Contract awards had also slumped significantly in the third and fourth quarter of last year.-Reuters