{"id":21476,"date":"2016-07-31T15:39:39","date_gmt":"2016-07-31T08:39:39","guid":{"rendered":"http:\/\/www.siamlandbank.com\/propertynews\/property-news\/saudi-arabia-construction-market-has-dropped-80-per-cent-says-al-khodari-chief\/"},"modified":"2016-07-31T16:59:41","modified_gmt":"2016-07-31T09:59:41","slug":"saudi-arabia-construction-market-has-dropped-80-per-cent-says-al-khodari-chief","status":"publish","type":"post","link":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/saudi-arabia-construction-market-has-dropped-80-per-cent-says-al-khodari-chief\/","title":{"rendered":"Saudi Arabia construction market has dropped 80 per cent, says Al Khodari chief"},"content":{"rendered":"


\nThe chief executive of Saudi Arabia’s only publicly traded builder has estimated that the construction market in the kingdom has shrunk by as much as 80 per cent.Fawwaz Al Khodari, the head of Al Khodari & Sons, also revealed the contractor has avoided bidding on some government projects because of payment delay concerns.”The construction market has slowed down immensely,” he said. “While we do not have definite numbers as statistics are sometimes contradicting, from the client base that we have been working with in the past, we believe, and are confident when we say, that construction has slowed down by at least 80 per cent,” he said.Al Khodari last week posted a net loss of 43.3 million Saudi riyals (Dh42.1m) for the second quarter of this year, compared to a profit of 34.9m riyals in the same period last year. This was largely because of a 37 per cent fall in revenue to Dh252.5m riyals, which Mr Al Khodari blamed on the lack of new contract awards in the kingdom, although he added that it had wilfully not bid for some government-related contracts because of payment delay concerns. “We’ve taken some bold moves that may cost us in the immediate term, but in the med\u00adium to long term we believe they will reap us a lot of benefits and will free a lot of our resources to embark on the good opportunities that we see in some other sectors right now.”Saudi Arabia’s government halted payments to contractors and the award of new contracts in the third quarter of last year while it formulated its new Vis\u00adion 2030 economic diversification plan. He said the government has prioritised its payments into four tranches, with government employees’ salaries in the first tranche and contractors in the fourth, meaning they are last in line to be paid. He added that Al Khodari was in a better position than many rivals, as it has a street cleaning and maintenance arm (providing 30 to 40 per cent of its revenue) that is receiving payment.Until 2014, almost all of Al Khodari’s work was carried out for government clients, but it has since diversified, setting a target of securing at least 35 per cent of its work from private sector clients. It is now targeting the indus\u00adtrial, petrochemicals and oil and gas markets with Aramco as one target customer.”Many contractors have either reduced their appetite, or perhaps they have changed their business lines or they have just had challenges that have put them out of competition,” he said. “This means that contractors are fairly scarce in a number of sectors now, and as gloomy as the market looks, in some sectors it has become an opportunity.”He said that the firm is also gearing up for more involvement in the housing and leisure sectors, which are set for huge expansion following publication of the kingdom’s Vision 2030 plan, but argued that none of these were likely to emerge this year.Ghada Jendoubi, an analyst with the equity research company Alpha Mena, said that Al Khodari’s poor financial results “were expected” given Saudi Arabia’s fiscal deficit (which equates to 13 per cent of GDP this year) and its decision to cut investment in infrastructure.”Al Khodari is definitely going towards [its] worst year, especially in such difficult market conditions,” she said. “We keep our negative opinion on Al Khodari and the construction sector in the Mena region as a whole.”mfahy@thenational.aeFollow The National’s Business section on Twitter
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\nSource : thenational.ae
\nRead more…Saudi Arabia construction market has dropped 80 per cent, says Al Khodari chief<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The chief executive of Saudi Arabia’s only publicly traded builder has estimated that the construction...<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"false","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true},"categories":[1],"tags":[],"class_list":["post-21476","post","type-post","status-publish","format-standard","hentry","category-property-news"],"jetpack_featured_media_url":"","jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p75ss1-5Ao","jetpack-related-posts":[{"id":21470,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/saudi-arabia-construction-market-has-dropped-by-80-per-cent-says-al-khodari-chief\/","url_meta":{"origin":21476,"position":0},"title":"Saudi Arabia construction market has dropped by 80 per cent, says Al Khodari chief","date":"July 31, 2016","format":false,"excerpt":"\r Activity in Saudi Arabia's construction market has declined by about four-fifths, according to the head of one of the Kingdom's most prominent contracting groups.Fawwaz Al Khodari, the head of Saudi Arabia's only contracting firm whose shares are publicly traded, Al Khodari & Sons, told analysts in a call on\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":48692,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/light-at-end-of-tunnel-for-saudis-contractors-says-al-khodari\/","url_meta":{"origin":21476,"position":1},"title":"Light at end of tunnel for Saudi's contractors, says Al Khodari","date":"March 18, 2017","format":false,"excerpt":"\r Conditions in Saudi Arabia's contracting market are likely to improve this year but only in the second half, according to the head of a leading construction company in the kingdom.Fawwaz Al Khodari, the chief executive of Al Khodari & Sons, said that his company had experienced \"a very, very\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":4289,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/saudi-contractor-al-khodari-to-reduce-reliance-on-public-sector-work\/","url_meta":{"origin":21476,"position":2},"title":"Saudi contractor Al Khodari to reduce reliance on public sector work","date":"February 10, 2016","format":false,"excerpt":"\r \r The Saudi Arabian contractor Abdullah A M Al Khodari & Sons (Al Khodari), whose value of government contracts fell by almost half last year, is targeting more private-sector work and deals in the GCC and Africa after cutting 8,000 jobs last year.The amount of new work won by\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":36054,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/saudi-government-payments-to-construction-firms-may-not-mean-a-speedy-market-recovery-builders-warn\/","url_meta":{"origin":21476,"position":3},"title":"Saudi government payments to construction firms may not mean a speedy market recovery, builders warn","date":"November 23, 2016","format":false,"excerpt":"\r Builders have cautioned that the Saudi government's instigation of repayments to its suffering construction industry may not avert a prolonged lull next year before a recovery takes hold of the market. Joseph Daher, the chief executive of the Jeddah-based Almabani General Contractors, said payments started to filter through from\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":4160,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/contractors-feel-the-pinch-as-saudi-government-goes-slow-in-awarding-projects\/","url_meta":{"origin":21476,"position":4},"title":"Contractors feel the pinch as Saudi government goes slow in awarding projects","date":"February 9, 2016","format":false,"excerpt":"\r \r The value of new contracts won by the Saudi contractor Abdullah A M Al Khodari & Sons last year fell by nearly 50 per cent as \"government entities did not proceed with awards\" in the run-up to its 2016 budget announcement in December.The company, which is based in\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":4154,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/contractors-feel-the-pinch-as-saudi-government-goes-slow-in-awarding-contracts\/","url_meta":{"origin":21476,"position":5},"title":"Contractors feel the pinch as Saudi government goes slow in awarding contracts","date":"February 9, 2016","format":false,"excerpt":"\r \r The value of new contracts won by the Saudi contractor Abdullah A M Al Khodari & Sons last year fell by nearly 50 per cent as \"government entities did not proceed with awards\" in the run-up to its 2016 budget announcement in December.The company, which is based in\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts\/21476"}],"collection":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/comments?post=21476"}],"version-history":[{"count":0,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts\/21476\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/media?parent=21476"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/categories?post=21476"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/tags?post=21476"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}