Khodari Q1 net profit up 78pc on auction

April 21, 2014 - 12:00:00 am

DUBAI: Major Saudi Arabian construction firm Abdullah A M Al Khodari Sons said yesterday that its net profit for the first quarter of this year jumped 78 percent on the back of earnings from an auction of plant and machinery.

Net profit rose to SR32.63m ($8.7m) from SR18.28m a year earlier. The machinery auction brought in SR41.3m of income.

Operating profit plunged 96 percent to SR1.02m, however, partly because of reforms to Saudi Arabia’s labour market which have made it more expensive to hire foreign workers. Work permit costs to the company increased by SR13.2m.

Profit was also hurt by an increase in depreciation costs as the company deployed equipment for newly awarded 

projects worth SR1.5bn, a 31 percent rise in manpower costs mainly due to a ramp-up of labour-intensive cleaning projects, and a 69 percent leap in financing charges as the company enlarged its funding base to meet its contract backlog.