RIYADH: Saudi Arabia's Abdullah A. M. Al-Khodari Sons Co said on Tuesday its fourth-quarter net profit slipped 68.9 percent as earnings at the construction firm continued to be hit by changes to employment law in the Kingdom.
Al Khodari made 8.5 million riyals or $2.3 million in the three months to Dec. 31, versus 27.3 million riyals in the corresponding period of 2012, it said in a bourse filing.
The firm cited increase manpower costs, up 28.4 percent year-on-year and a 63.8 percent hike in financing costs as some of the reasons for the profit decline.
The postponement of an auction of surplus equipment to the first quarter of this year also impacted the bottom line.
In late 2012, the Labour Ministry began charging companies a fee of 2,400 riyals for each foreign worker they employed above their number of Saudi staff.
The policy is part of efforts to encourage companies to hire Saudi nationals, who are generally more expensive than foreigners.
The firm and other construction companies have also been pressured by other labour policies, such as a quota system for the percentages of Saudis which firms must employ, even as demand for their services grows with the country's economic boom and heavy infrastructure spending by the government. (Reuters)