Oman’s largest construction and engineering group Galfar Engineering & Contracting Company has clinched RO69mn worth of new contracts this year, bringing its total order book to RO403mn at the end of the first quarter of 2021.
The management of the company, going forward, expects to maintain a solid project pipeline with a significant number of new tenders under evaluation across a diverse array of sectors and clients.
‘We reasonably expect to be successful in a number of those tenders which will ensure stability and sustainability of our strong market position,’ Galfar Engineering & Contracting Company said in its first quarter financial report submitted to the Muscat Stock Exchange.
As a ‘flagship’ for Oman’s contracting and engineering business, Galfar said it is looking forward firmly to build on its strength and to continue supporting the government endeavors for economic growth and pursue important development and infrastructure projects.
‘During 2021, Galfar has received new orders worth RO69mn, and the total order book as of date is around RO403mn,’ the company said.
However, Galfar’s group revenues dropped by more than 11 per cent to RO51.477mn in the quarter ended March 31, 2021 compared to RO58.163mn in the same period of 2020 on account of reduced scope of works and cash flow constraints, the company said.
The group reported a net profit of RO1.496mn in the first quarter of 2021 against a net loss of RO7.654mn in the same period of last year.
Galfar said net profit was achieved due to the operating profit achieved by the parent company on account of improved cost control measures.
‘The parent company has certified overdue receivables of more than RO52mn as of date from the government and its related entities. 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 2020,’ Galfar said.
Galfar said its board of directors and management continue to explore opportunities to reduce operating expenses, to maintain competitiveness and to improve financial results whilst strengthening the company’s financial position.
It added that the company resources are optimised continuously to align with the financial situation.
‘The board and management are determined to turnaround and improve the financial performance of the company through various measures such as overdue collections, restructuring, cost optimisation and better project performance,’ Galfar said.
The company has also implemented its turnaround strategy and will continue with it throughout the year 2021.
Measures, Galfar said, have been put in place to control the manpower expenses and overhead expenses which are expected to reduce cashoutflow and improve the operating financial results going forward.