By Staff writer
Contractor believes it can recover 'significant percentage' through negotiation, arbitration and other legal claims
Saudi building contractor Mohammad Al Mojil Group (MMG) is pursuing around SR1.5bn ($400m) in outstanding fees it is owed by its customers and believes that it can recover a "significant percentage" through negotiation, arbitration and other legal claims in the coming years.
The Dammam-based firm said that it "continues to take steps to recover money due from customers on completed projects", which are significant assets that it cannot currently recognise on its balance sheet.
The company said that it is pursuing claims and legal actions for amounts worth $320m (SR1.2bn). It also said it is looking to recover a further $80m (SR300m) in disputed final accounts.
MMG made the announcement after declaring a Q3 loss of $2.1m, which is a 76 percent reduction on the $9m lost in the same period last year.
Losses in the nine months to date are $28.9m - an 84 percent improvement on the $180.5m lost in the first nine months of last year.
Its total accumulated losses have now reached over $623m, and its deficit to shareholders now stands at over $290m.
However, the company argued that its contract revenues exceeded the costs of these revenues by $32.5m during Q3, compared to $4.4m in the same period last year, although this improvement was offset by an increase in provisions against contract costs.
The company also argued that it has been generating better cashflows as it got a better grip on ongoing projects and had made "significant progress in removing further risks" on its remaining fixed-price contracts.
It also said that it has signed new deals on less risky contracts in the last 60 days worth over $26.6m as well as $13.3m of deals to provide additional services like scaffolding and steel fabrication to other contractors.
"Further to the above, MMG has recently signed MOUs with reputable companies to establish long term joint ventures to further enhance its revenue and profitability opportunities. These new JVs are currently being finalised and will be announced to shareholders over the coming months," the company said in a statement.
It has also already secured 25 percent of its turnover target for 2014, and said that it expects to have 70 percent of its target revenues confirmed by the end of 2014.
"Based on this, MMG is currently moving as planned to meet or exceed its revenue and gross margin plan for 2014."