JEDDAH – Financially troubled Dammam-based Saudi construction company Mohammad Al-Mojil Group (MMG) halved its fourth-quarter net loss on the year to SR526.1 million ($140.29 million), it said Saturday. The drop in the fourth quarter net loss was due to a decline in provisions the company took against an expected increase in the cost of completing projects by SR140.1 million, it said in a statement. Its fourth-quarter 2011 loss was SR1.18 billion. Last November, shareholders in MMG rejected the idea of liquidating the company, which is involved in oil and gas projects, mainly for Aramco. The company's recovery plan includes asset sales, cutting bank debt and absorbing accumulated losses. Last January, MMG said it plans to start legal action to collect dues and claims worth more than SR400 million ($107 million). The company faced significant challenges in providing liquidity due to the complex structure imposed on the company by lenders in managing their bank accounts, in addition to the delay made by some customers to pay dues owed to it. The new administration focused on efforts to manage cash flows during the previous period in order to provide minimum liquidity to finance the necessary activities to sustain the company's core operations, where they had to provide liquidity during the second half of the year 2012, by relying on cash flows from operations, mainly on the sale of some assets. – SG However, the level of liquidity was not enough, which negatively impacted on the profitability of existing projects. This was mainly attributed to the inability of the company to provide full project requirements in terms of materials because of delays in payments to suppliers and that led to low labor productivity and poor performance in completion of projects. All these resulted in an increase in the cost for implementing projects. – SG
