15 February 2011
MUSCAT: Galfar Engineering & Contracting yesterday announced a 57 per cent growth in net profit at RO5.91 million for 2010, over the previous year.
However, total revenue for the full year fell 10 per cent to RO371.85 million from RO413.77 million achieved in the previous year. But on a quarter-on-quarter, the revenue improved by 11 per cent on faster execution and impact of completion of Muscat Expressway project, United Securities said in a research note. "Galfar Engineering's earnings increased by 34.5 per cent on a quarter-on-quarter basis in the fourth quarter and were above our expectation of RO1.9 million. Better-than-expected execution in the fourth quarter led to the variance in profitability," said a research note from EFG Hermes.
"Galfar executed RO105.8 million worth of contracts in the fourth quarter, up 15 per cent on a quarter-on-quarter basis and 20 per cent on year-on-year basis," EFG added.
Total expenses also declined by 11 per cent on year-on-year and are in line with revenue decline.
New contracts
"We assume this on better procurement capabilities following entry of new purchase contracts and increased by 10 per cent on quarter on quarter, in line with revenue growth," another research note from United Securities said. Galfar has a current order backlog of RO401 million in 2010.
United Securities said with the current pace of contract additions, especially of high-value airport contracts, there is unlikely to see a reversion in margins on the back of higher government backed spending, signaling a better revenue visibility. "We expect 2011 to be a better year for operational performance with the current sluggishness is not likely to sustain," United Securities report said.
MUSCAT: Galfar Engineering & Contracting yesterday announced a 57 per cent growth in net profit at RO5.91 million for 2010, over the previous year.
However, total revenue for the full year fell 10 per cent to RO371.85 million from RO413.77 million achieved in the previous year. But on a quarter-on-quarter, the revenue improved by 11 per cent on faster execution and impact of completion of Muscat Expressway project, United Securities said in a research note. "Galfar Engineering's earnings increased by 34.5 per cent on a quarter-on-quarter basis in the fourth quarter and were above our expectation of RO1.9 million. Better-than-expected execution in the fourth quarter led to the variance in profitability," said a research note from EFG Hermes.
"Galfar executed RO105.8 million worth of contracts in the fourth quarter, up 15 per cent on a quarter-on-quarter basis and 20 per cent on year-on-year basis," EFG added.
Total expenses also declined by 11 per cent on year-on-year and are in line with revenue decline.
New contracts
"We assume this on better procurement capabilities following entry of new purchase contracts and increased by 10 per cent on quarter on quarter, in line with revenue growth," another research note from United Securities said. Galfar has a current order backlog of RO401 million in 2010.
United Securities said with the current pace of contract additions, especially of high-value airport contracts, there is unlikely to see a reversion in margins on the back of higher government backed spending, signaling a better revenue visibility. "We expect 2011 to be a better year for operational performance with the current sluggishness is not likely to sustain," United Securities report said.
© Times of Oman 2011
