Muscat – Galfar Engineering & Contracting Company, the largest construction firm in the sultanate, has reported a major improvement in its financial performance during the year 2021 despite the pandemic-related challenges and weak economic growth.

For the year ended December 31, 2021, the parent company achieved a net profit of RO4.63mn compared to losses of RO26.11mn in the previous year, Galfar said in its yearly report submitted to the Muscat Stock Exchange.

This improved performance, Galfar said, is on account of various initiatives taken by the company as part of its turnaround strategy to reorganise, improve projects performance and implement stringent cost controls.

‘The positive bottom-line results came despite various challenges such as drop in revenues by approximately 10 per cent compared to the previous year, continued COVID-19 challenges and cash flow constraints due to late receipt of payments,’ the company noted.

Galfar’s group financial statements for the year 2021 recorded a decreased turnover of RO187.9mn (against RO208.9mn in 2020) with a net profit of RO1.3mn (against a net loss RO28.3mn in 2020).

By the end of 2021, Galfar (the parent company) has certified overdue receivables of more than RO42mn, majority of which are related to long-completed transportation projects and waste water network projects, the company said.

It added that the delay in receiving overdue amounts continues to exert significant strain on the company’s cash flow, which resulted in suboptimal execution of certain projects and delay in completion of others. As a result, revenues in 2021 were lower than planned and lower than previous year.

For the year ended December 31, 2021, Galfar received new project awards worth RO147mn and RO59mn of additional work orders through variations and extensions of ongoing projects.

Despite the economic situation and reduction of spending in public projects, Galfar said it continues to maintain significant projects pipeline of RO405mn.

Within this order book the company is still waiting to receive the commencement order for projects awarded in previous years such as Dualization of Haima-Thumrait Package-4 Project (awarded in July 2020), Wadi-Alyen Water Network Project (awarded in July 2019) and Muscat Airport Southern Runway Refurbishment Project (awarded in October 2021), for which commencement orders continue to be delayed.

Galfar said its board and management are determined to turnaround and improve the financial performance of the company with continued focus to implement the company’s turnaround strategy.

‘Going forward, the management expects to maintain a solid project pipeline in excess of RO400mn 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 which will ensure stability and sustainability of our strong market position,’ the company said.

In addition, Galfar said it has identified various diversification opportunities in construction technology, energy, minerals and other sectors that will provide long-term sustainability and growth opportunities for the company in the future.

Galfar said it is optimistic about 2022, especially because the company continues to have a large order book of contracts in hand, totalling more than RO400mn.

‘The focus is on achieving a positive return from this order-book through the implementation of several strategic objectives in the transformation strategy, which will improve the company’s financial situation as well as further strengthen it by gaining new contracts for each business unit,’ the company added.

© Apex Press and Publishing Provided by SyndiGate Media Inc. (Syndigate.info).
Dileeshiya