Galfar's order book increases to Ro579mn on new contracts
Driven by new contract awards, Galfar Engineering & Contracting Company, the largest construction firm in Oman, has recorded significant growth in its order book, which rose to Ro579mn at the end of 2023 compared to Ro517mn a year ago.
The order book improvement came as a result of new project awards worth Ro397mn to the company during 2023, according to Galfar's yearly financial statement submitted to the Muscat Stock Exchange.
Galfar generated significantly higher sales revenue during 2023 and continued to achieve positive operating results. The company's sales revenue jumped by 43.7% year-on-year during 2023 to reach Ro239mn, supported by a robust order book with a positive operating profit.
However, the parent company's net profit dropped to Ro0.57mn in 2023 compared to Ro4.63mn recorded in the previous year. The parent company continues to make 96% of Galfar's entire consolidated business.
'The main factors for the decline in net profit are related to non-operational reasons concerning the implementation of the new labour law, especially regarding end-of-service benefits for foreign employees,' Galfar said in its report.
Galfar mentioned that its subsidiary companies in Oman, which include Aspire Readymix,
Aspire Projects, and Al Khalij Heavy Equipment, substantially improved their performance in 2023. The subsidiary companies' bottom line improved from a loss of Ro2.94mn in 2022 to Ro0.02mn in the year ended December 31, 2023.
As per the company report, Galfar is determined to improve its subsidiaries and associates’ performance and has put in place strategic plans and measures to overcome associated challenges to further improve the business with full support from the parent company.
Future outlook
Galfar expects to maintain a solid order book of over Ro500mn in the future 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 projects which will ensure the stability and sustainability of our strong market position. In addition, the company continues to progress in various diversification opportunities in construction technology, energy, PPP projects, and other sectors that will provide long-term sustainability and growth opportunities for the company in the future,' Galfar said.
With the announcement of numerous infrastructure projects in Oman, Galfar said it is looking ahead to 2024 with optimism, buoyed by the substantial volume of work available in Oman. The company said it views the abundance of projects as a significant opportunity for growth and expansion. Particularly crucial to Galfar's strategy is its continued emphasis on the energy sector, where it maintains a robust order book.
'As of the outset of 2024, Galfar's order book stands at an impressive value of over Ro579mn, underlining its strong position in the market and its readiness to capitalise on emerging opportunities. This substantial backlog not only provides a solid foundation for the company's operations but also signifies its proactive approach to securing future growth and success in Oman's thriving construction landscape,' the company said.
In its report, Galfar noted that it is committed to turnaround and improving financial performance with a continued focus on implementing the company’s turnaround strategy.
'The company continued to explore avenues to strengthen its financial position in a challenging and highly competitive economic environment. As part of the company’s turnaround strategy, measures to control expenses and improve efficiencies in project execution are pursued,' Galfar added.
Galfar expects to maintain a solid order book of over Ro500mn in the future with a significant number of tenders under evaluation across a diverse array of sectors and clients