Saudi Arabia contractors face hassles from lenders, says Al-Khodari

Saudi Arabia-based contracting firm Abdullah A. M. Al-Khodari Sons Co. said on Thursday that some contractors are facing problems when borrowing due to prudent credit policies.

Credit risks, along with other factors, have put a question mark around how far lenders can go when dealing with those contracting companies.

These factors include lower profitability, higher labor license fees, untimely deliveries and inflated unbilled receivables.  

On the balance sheet, Al-Khodari’s gross debt neared SAR 1.34 billion, of which more than 70 percent are short-term loans maturing in 2015.

Last November, the board of directors proposed a capital increase through a SAR 500 million rights issue to fund expansions and future projects.

The company posted a 57 percent year-on-year increase in net profit to SAR 101 million (SAR 1.91 EPS) in 2014, compared to SAR 64.3 million a year earlier.

On the ownership of board members, Abdullah A. M. Al-Khodari, chairman of the company, saw his stake decrease about 99 percent to almost 3.3 thousand shares by the end of 2014. The equity of chief executive Fawaz Abdullah was also cut to 399.9 thousand shares by the end of 2014.

The contractor’s backlog improved to SAR 4.372 billion in 2014, from SAR 3.678 billion a year earlier. The following table illustrates the company’s backlog development from 2012 to 2014