As the losses continue to mount at Galfar Engineering and Contracting, the company has implemented a turnaround strategy to strengthen its financial position.
The group’s financial performance during the year 2020 has resulted in a net loss of RO28.3mn in comparison to a net loss of RO6.2mn in 2019, Galfar said in its yearly report submitted to the Muscat Securities Market (MSM). It said the parent company reported a net loss of RO26.1mn for 2020 compared to net loss of RO20.1mn in the previous year.
Galfar said its 2020 performance was impacted due to the COVID-19 pandemic, related idling of resources and additional costs, time and cost overruns in major projects.
‘The liquidity issues of the company continued on account of delay in receipt of certified payment from the government and its related entities.’
‘The unpaid certified receivables were at RO64mn at closing of the year. This has impacted ability to do business and has impacted our profitability,’ the company said.
Galfar in its report to MSM informed that the company has implemented its ‘turnaround strategy’ and will follow it through in 2021.
‘In order to address the latest challenges and to position Galfar better serve the market, a transformation strategy has been put into place to guide Galfar direction and focus in the future. The operational units have been reorganised to rationalise resources, to optimise cost, to align with changes in the market and to align with the diversification streams the country has established as part of its 2040 Vision,’ the company explained.
The transformation strategy, Galfar said, has been launched with six main focus areas and strategic objectives under each of these focus areas. ‘The focus areas include: Restructuring and reorganisation, efficiency and cost savings, financial and liquidity improvements, diversification and capability, technology and innovation, and reputation and stakeholders.’
The company said it is also evaluating various options with regards to financial restructuring in order to improve the financial position and liquidity situation in the company.
Galfar, however, said it approaches 2021 with an optimistic approach especially as the company continues to maintain significant order book of jobs in hand at above RO370mn out of which RO43mn are related to oil and gas sector.
‘Through the implementation of various strategic objectives in the transformation strategy, the focus is to achieve positive return from this order book which will enhance the company financial position as well as further strengthening it by winning new contracts for each business unit,’ the company added.