Oman-based Galfar Engineering & Contracting has reported a net profit of RO2.626 million ($6.8 million) for the first half of the year compared to losses of RO11.044 million ($29 million) for the same period last year.
This is the company's first profit after six straight years of losses as the companys new turnaround plan, which was adopted earlier this year, has started showing signs of progress, said Galfar in its statement.
The sultanates largest construction and contracting firm pointed out that this improved performance was on account of various initiatives taken by the company as part of its turnaround strategy especially
restructuring & re-organization and the implementation of stringent cost control measures.
The positive bottom-line results came despite a drop in revenues by approximately 6% compared to the same period in 2020 as a result of reduced scope of works, and cash flow constraints.
Galfar has certified overdue receivables of more than RO52 million as of date from government and government related projects.
Majority of these certified overdue receivables are relating to long-completed transportation and waste water network projects, it stated.
The delay in receiving the overdue amounts has caused a significant strain on our cash flow, which resulted in suboptimal execution of certain projects and delay in completion of others. As a result, revenue was lower than planned and lower than the same period in 2020, it added.
Galfar said its subsidiaries in Oman which includes Aspire Readymix, Aspire Projects and Al Khalij Heavy Equipment incurred losses of RO1.219 million in H1 compared to losses of RO93,000 last year.
The company's board and management continues to explore opportunities to reduce operating expenses, to maintain its competitiveness and improve the financial results whilst strengthening its financial position, it added.-TradeArabia News Service
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