Contractor Al Hassan hit by project delays
Omani company's backlog grows, chairman remains confident on prospects
Project delays and overruns proved to be costly for Omani contractor Al Hassan Engineering in 2012, leading the company to declare a net loss of $9.8m compared to a $6.4m profit in 2011.
Newly-filed accounts for the company, which specialises in infrastructure, power and oil & gas contracts, show that its contract income dropped by 18% to $129m (2011: $157.6m).
A directors' report accompanying the accounts by chairman Hasssan bin Ali Salman said that despite entering the year with a substantial backlog of projects, these had a "lower executable content" than in previous years as many contract awards failed to convert into on-site work.
The company completed several major projects during the year including a civil construction works contract at the A'Seeb wastewater project for main contractor Hyundai-Rotem, a 260MW power station at Amal for PDO and a long-term power supply project for Accidential Mukhaizna.
It also secured a number of major new contracts including an ECP deal at the Zauliyah Gas Plant for PDO in a joint venture with Tecnidas Reunidas, construction of heat recovery steam generators at the Amal Power plant and a deal to build export pipelines for OOCEP.
This meant that the company's project backlog increased by 30% during the course of the year - from around $180m to $233.7m (RO: 90m).
"The opening order book for 2013 is strong, in excess of RO: 93m ($241.5m) with opportunities for securing additional business in the year ahead," said Ali Salman. "In Oman, investment plans continue to be healthy in all of the company's targeted markets.
"In addition, the adjacent markets of the UAE and the rest of the region are all planning significant investments in (the) same market sectors.
"Though the competition is expected to be intense, the company is well-placed, has some unique advantages to be able to bid and obtain contracts in line with strategy."