Oman-listed contractor Galfar hit by payment delays in 2017
The contractor and its subsidiaries recorded consolidated revenues worth $575m for the period ending 30 September, 2017 – 14% lower than corresponding revenues for last year
Payment delays have affected Galfar Engineering and Contracting's financials this year.
In a missive issued to the Muscat bourse, Galfar stated it had been "significantly affected by the delays in receiving its dues of [...] projects".
The contractor and its subsidiaries recorded consolidated revenues worth $575m (OMR221.5m) for Q3 2017, 14% lower than consolidated revenues worth $668.6m (OMR257.5m) in the corresponding period of 2016.
Revenues for parent company during the period amounted to $543m (OMR209.1m) this year, a reduction compared to revenues worth $637.5m (OMR245.5m) earned in the corresponding period of 2016.
Galfar said its parent-level revenues were "significantly impacted by reduced levels of activity in public infrastructure".
While the contractor confirmed it had a "solid work pipeline" to look forward to, chairman Majid Salim Said Al Fannah Al Araimi said that payment delays had significantly impacted the company, which was particularly awaiting payments of "already completed projects".
Financial pressures also related to payments Galfar owed to its suppliers and subcontractors.
"Due to this situation, the ability of the company to meet its commitments is dependent on the ability of our clients to make project payments without delay as and when they are due going forward," Al Araimi said in a statement.
"The expected settlement of Muscat Expressway did not materialise in the reporting period."
Galfar's parent company boasts an order book of $1.36bn (OMR526.7m), and the value of its new contracts, extensions, and variations for the first nine months of 2017 was $216m (OMR83.2m).
The latter included a contract award for the Ministry of Transport and Communications' Batinah Expressway project, and Oman Electricity Transmission Company's Grid Stations at Birkat Al Mouz and Sumail.