Al Hassan net rises 13% as payment rolls in

Al Hassan targets oil and gas projects among others.

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Al Hassan Engineering saw net profits and contract revenue rise for the first nine months against the same period last year as money filtered through from clients and finance charges fell.

The Omani contractor, which has a focus on the oil & gas industry as well as mechanical and electrical work, saw after-tax gains reach OR1.7 million, up 13% against the OR1.5 million posted last year. Contract income reached OR39.3 million, up 6.3% from OR37 million.

The figures, reported the company in a statement to shareholder, were “due to improved performance on several projects and the substantial reduction in finance costs as a result of a higher level of cash collection from customers on major projects which were closed during the last year.

“Your company expects that contract income will further increase in the balance period of 2010 as a number of major projects will reach their completion phase,” it said.

Big contract wins in the first half of the year have bolstered the books, including an OR2.2 million a joint venture with Korea’s GS Engineering & Construction to provide Electrical and Instrumentation work to the PDO Saih Nihayda Depletion Compression project.

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Other projects include the Amal Power Plant project, the first EPC project of its kind undertaken by an Omani Company, which is on schedule despite equipment suply delays; the Kauther project, in which it is building a camp with Petrofac Engineering & Construction and is working on civil, structural and piping work; and the Nimr-C Full Field Water Injection project, which has major works completed but which will be recommissioned at the beginning of this year due to changes made by the clien.

The company has won OR2.1 million in additional work for existing contracts in the third quarter, and OR11.6 million

The company’s stock closed down more than 4.7% though has been a steady but modest risers in the GCC construction sector. Its share price has grown steadily from OR0.38 this time last year to OR0.5.

“A number of major projects are expected to be finalized in the remainder of this year and the first quarter of next year,” added Hassan Bin Alil Salman, chairman, in the statement. “Your company is actively participating in the associated tendering processes.”

Analysts have improved their view on the company over the year. Last month, Bank of Muscat's Vishal Gupta recommneded a "hold" on the shares, with Kanaga Sundar at Gulf Baader Capital Markets advising stock pickers to "accumulate". This has improved from the "neutral" view taken by EFG Hermes in Dubai back on 26th May.