For the past five years, construction companies across the region have faced growing financial pressures as a result of the slowdown in new projects and increased competition, forcing them to take on work at extremely low bid prices. The emergence of the Covid-19 pandemic in February 2020 has added to the pressure on contractors.
The spending cuts made by governments in response to the economic slowdown, alongside the disruption to supply chains and delays to projects, has resulted in even greater delays in payments and a reduction in new project opportunities.
The biggest challenge for construction companies is to ensure they have enough cash coming into their business to sustain their financial commitments and liabilities while their payments and other revenues are disrupted.
Not only are construction companies facing a slowdown in payments, but their operational costs have also risen as a result of the safety measures required to protect workers from the virus and disruption to supply chain.
The challenge is to find ways to access working capital in order to maintain cash flow while at the same time reducing operating costs to minimise financial obligations of the business.
Contractors need to work closely with their lenders, creditors and other partners to ensure they remain solvent and stable through the crisis and are able to then stabilise their businesses in anticipation of a recovery.
The fifth webinar in the Mashreq Construction Club Connect Series looks at the challenges of managing cash flow through the Covid-19 crisis.
> Yu Tao, Chief Executive Officer, China State Construction Engineering Corporation—CSCEC (Middle East)
> Johan Hesselsøe, Managing Director, Atkins UAE
> Roy Philip, Senior Executive Vice President and Group Chief Credit Officer, Mashreq Bank
> Mohammad al-Shouli, Executive Vice President, Global Head of Contracting Finance, Mashreq Bank
Hosted by Richard Thompson,
MEED's editorial director
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