DUBAI Jan 21 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
Al Khodari made 8.5 million riyals ($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.
($1 = 3.7504 Saudi riyals)
(Reporting by David French; Editing by Dinesh Nair)