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Tue 26 Jul 2016 10:42 AM

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Saudi builder Khodari slumps to Q2 net loss

Khodari, like many construction-related firms, has been pressured by a severe slowdown in the sector caused by cutbacks in state spending due to lower oil prices

Saudi builder Khodari slumps to Q2 net loss
GCC construction, Middle East construction

Saudi Arabian construction firm Abdullah Abdul Mohsin al-Khodari and Sons said on Tuesday it swung to a net loss in the second quarter as earnings were pressured once again by a slowdown in the kingdom's building sector.

The company made a net loss of 43.34 million riyals ($11.6 million) in the three months to June 30 compared to a profit of 34.86 million riyals in the year-earlier period.

EFG Hermes had forecast the company would make a net loss of 16 million riyals during the quarter.

Khodari cited a 37.4 percent dip in revenue, partly due to a lower contribution from newly awarded contracts. It also blamed a 10 percent rise in financial charges and a 43.7 percent drop in other income due to a decrease in sales of used equipment.

Last month, Khodari said it would book a 19.4 million riyal special loss after it received state permission to reallocate a government contract it won in 2014 to another company.

Khodari, like many construction-related firms, has been pressured by a severe slowdown in the sector caused by cutbacks in state spending due to lower oil prices. It had reported losses in two of the preceding three quarters.

The firm was awarded 54 million riyals of new contracts in the second quarter, down from 340 million riyals in the corresponding period of 2015.

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