A Saudi Arabian oil and gas contractor has said its net first quarter profit has fell by 96% compared to the same period of 2008, the news gathering agency Reuters reported.
Mohammad al-Mojil Group (MMG), blamed the slump in global demand for oil for causing delays in several high profile energy projects for the fall.Â
MMG posted a statement on the Saudi bourse’s website announcing a profit of US$1.4 million for the first quarter of 2009 compared to $38.2 million in 2008.
“The decline … is due to the delay in receiving requirements of projects, which has affected the pace … of these projects,” MMG was reported by Reuters as saying.
“This has resulted in an increase in costs and provisions and a decrease in profit margins, in addition to the implications of the economic changes in general,” the statement added.
It was not all bad news however as the company also stated that they had $800 million worth of projects by the end of last month. .
It is not just the global slump in demand for oil that is causing MMG problems. Several multi-billion dollar projects in the Kingdom have been delayed for strategic reasons as energy giant Saudi Aramco has told contractors to re-submit tenders to reflect the current low prices for raw materials. Many of the original tenders had been submitted in 2008 when prices were at their peak.
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