Oman- Galfar reports positive results amid award of new projects

(MENAFN- Muscat Daily) Muscat- Galfar Engineering & Contracting Co, the largest construction firm in Oman, announced positive financial results for 2018 as the company's operational performance substantially improved with awarding of several new projects during the year.

The group's net profit for the year 2018 came at RO2.2mn against a reported loss of RO6.5mn in the previous year. Total group revenue, however decreased to RO289.1mn in 2018 from RO293.1mn in 2017.

'The group's performance during 2018 has resulted in positive contribution to the equity and reduction in accumulated losses. The operational performance of the parent company has substantially improved. The company achieved noticeable improvements in cost control and planning and will relentlessly follow this improvement through in 2019', Galfar said in the company report submitted to the Muscat Securities Market.

Net profit of the parent company improved to RO5.7mn in 2018 against the loss of RO3.7mn in the previous year.

'The board and management continue to explore avenues to strengthen the company's financial position in a challenging external environment. There are strict measures in place to control the manpower expenses and overhead expenses. These efforts are expected to reduce cash outflow and improve the operating financial results further going forward', the company said.

During 2018, Galfar said the parent company was awarded RO152mn worth of new projects and extension/variation. The order book of the company stands at RO380mn out of which RO177mn is related to oil and gas sector.

'Despite contraction of spends due to depressed oil prices, the company is well placed to maintain a healthy order book and has potential opportunities in the areas of gas production and downstream projects. It has a strong customer connect with selected clients in the region, which is expected to yield significant order wins and the outlook for the business is quite positive', Galfar said.

The company said it has taken a strategic initiative to expand operations in the Middle East and North Africa region and has registered a wholly-owned subsidiary in Kuwait to execute projects in infrastructure and oil and gas sectors. Currently projects in East Africa and Kuwait are being studied as potential new areas of work, it added.

Despite improved performance in 2018, Galfar said the liquidity issues of the company continued on account of delay in receipt of certified payments from the government and its related entities. 'The unpaid certified receivables were at RO60mn at the closing of the year. This has impacted ability to do business and has impacted our profitability due to the company borrowing the overdue receivables', the company added.

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