Abdullah A. M. Al-Khodari Sons Co. will hire a financial adviser to develop a future plan for the company and help it capitalize on the available opportunities, chief executive officer Fawaz Al-Khodari told Al-Arabiya TV on Monday.
“Al-Khodari’s board of directors is considering the best options to help the contractor weather the current headwinds and capitalize on potential opportunities going forward,” Al-Khodari added.
The situation would have been better, if shareholders had approved debt recapitalization.
Several reasons have led the Saudi contractor to widen its losses, mainly Nitaqat program, as well as the expat fees and Saudization program, which cost the company SAR 150 million and SAR 200 million, respectively.
Over the last four months, the company has reviewed its 50 projects, reassessed the related cost and completion ratio to fast-track their revival after resuming work.
After updating costs and quotations, these expenses were added to additional costs of suspended projects. Accordingly, the cost of 39 projects went up, which weighed on Q4 2018 results.
Al-Khodari cut costs to mitigate the impact of recent project halts, however expenditure exceeded cost cuts.
The construction firm is looking forward to receiving some incentives, as part of the government efforts to stimulate the private sector, Al-Khodari added.
In the last three years, several companies failed to survive the sector slowdown, as their ability to continue depends on solvency.
Last week, Al-Khodari said that its accumulated losses as on Feb. 12, 2019 widened to SAR 1.11 billion representing 198.52 percent of capital, Argaam reported.
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