Galfar’s nine-month profit falls 61% on delayed payments
Galfar Engineering & Contracting Company, the largest construction firm in the sultanate, reported a 61 per cent decline in its net profit for the nine months ended September 30, 2019, mainly due to a delay in receiving overdue payments and in completion of certain projects.
The company’s consolidated net profit dropped to RO2.2mn for the first nine months of 2019 from RO5.72mn net profit reported for the same period of last year. Galfar Engineering & Contracting also reported 10 per cent lower revenues for the January– September period of 2019 at RO189.53mn compared to RO210.86mn in the corresponding period of 2018.
Galfar Engineering & Contracting said the parent company has overdue receivables of RO71mn as of the date from the government and its related entities. ‘The delay in receiving the overdue receivables 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 and profitability were lower than planned and lower than the same period in 2018,’ the company said in its financial report submitted to the Muscat Securities Market (MSM).
Galfar Engineering & Contracting said the parent company has received new orders worth RO195mn during the January– September period of 2019. The company’s order book as of date is around RO434mn.
Galfar Engineering & Contracting said going forward it expects 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.’
‘The board and management continue to explore opportunities to reduce operating expenses, to maintain our competitiveness and to improve the financial results whilst strengthening the company’s financial position. The company resources are optimised continuously to align with the financial situation,’ Galfar Engineering & Contracting added.