Galfar revenues decline as late payments impact performance

Muscat - 

Galfar Engineering & Contracting Co, Oman’s largest construction firm, has reported a 9 per cent decline in its revenues for the first half of 2019, mainly due to the delay in receiving overdue payments, which resulted in a delay in completion of certain projects.

The company’s total revenues fell to RO126.94mn in the first half of 2019 compared to RO139.58mn in the same period of 2018.

The parent company has certified overdue receivables of more than RO38mn as of date from the government and its related entities, Galfar said in its financial report submitted to the Muscat Securities Market.

‘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,’ Galfar said.

Galfar’s consolidated net profit from continued operations also dropped more than 17 per cent to RO2.48mn in the six months period ended June 30, 2019 compared to RO3.016mn in the corresponding period of last year.

‘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 said.

It said, during the first six months of 2019, the parent company has received new orders worth RO117mn. The order book as of date is around RO423mn. Major contracts awarded during the period are the construction of water network in the wilayat of Al Hamra for RO27mn and dualisation of Rusail-Nizwa road for RO86mn.

Galfar 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 tenders, which will ensure stability and sustainability of our strong market position,’ the company added.

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