Gammon Pakistan secures no new projects in Q4, cites challenging market conditions

July 06, 2026 (MLN): Gammon Pakistan Limited (PSX:GAMON) did not secure or undertake any new construction project during the fourth quarter ended June 30, 2026, and accordingly, no operating revenue was generated from contract activities, the company said in its quarterly progress report.

Management, however, continued to actively pursue business opportunities in both the public and private sectors through participation in tendering activities, liaison with prospective clients, and exploration of potential collaborations, though prevailing market conditions and limited availability of viable projects did not result in the award of any new business during the quarter.

The company said the overall business environment for the construction and infrastructure sector remained challenging during the quarter.

It noted that although the government announced a national development budget of approximately Rs3.669 trillion for FY2026-27, including a Federal Public Sector Development Programme (PSDP) allocation of Rs1 trillion, the practical impact of these allocations is expected to materialize gradually over the coming financial year.

During the period, the State Bank of Pakistan maintained the policy rate at 11.5% while noting that inflationary pressures had re-emerged and economic activity continued to reflect the effects of higher prices, fiscal restraint, and prevailing economic uncertainty.

Headline inflation increased to 11.1% in June 2026 on a year-on-year basis.

The company said these factors continued to influence investment decisions, delayed project awards, and resulted in cautious spending by both public and private sector clients.

Notwithstanding the prevailing market conditions, the company said it remained focused on business development throughout the quarter, maintaining liaison with government departments, public sector organizations and private sector clients, and evaluating potential projects with emphasis on commercial viability, financial prudence and effective risk management.

Efforts also continued towards resolving outstanding contractual matters and strengthening the company's position for participation in future opportunities as market conditions improve.

The company said it continued to exercise strict financial discipline during the quarter, with administrative and operating expenditures carefully controlled to preserve liquidity and optimize available resources.

Management also continued its efforts for recovery of outstanding receivables, retention monies and contractual claims relating to completed projects, with the objective of strengthening the company's financial position and supporting future business operations.

While the company did not secure any new business during the quarter, the board remains optimistic regarding the medium-term prospects of the construction sector.

 The planned increase in development spending under the national budget, together with continued investment in infrastructure and logistics, is expected to gradually improve opportunities for contractors, the company said, adding that it remains committed to pursuing commercially viable projects, maintaining financial discipline, and positioning itself to capitalize on emerging opportunities as market activity gains momentum.

The company concluded that the absence of new project awards during the quarter primarily reflects prevailing market conditions rather than any reduction in its business development efforts, with the board confident that continued focus on prudent financial management, recovery of outstanding claims, and active pursuit of suitable business opportunities will strengthen its operational and financial position and support the resumption of sustainable business activity as economic conditions improve.

The aforementioned information was disseminated through a notification to Exchange.

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