Gammon Pakistan's 1QFY27 progress report shows no new projects

October 02, 2026 (MLN): Gammon Pakistan Limited (PSX:GAMON) did not secure or undertake any new construction project during the first quarter ended September 30, 2026, and generated no operating revenue from contract activities, according to its quarterly progress report.

In the report sent to the Pakistan Stock Exchange (PSX), the company said it continued to pursue business opportunities in the public and private sectors, where financially feasible, along with liaison with prospective clients and exploration of potential collaborations.

However, market conditions, elevated input costs, cautious client spending and limited availability of commercially viable projects did not result in any new award during the quarter.

The company described the operating environment for the construction and infrastructure sector as challenging throughout the quarter. It noted that the State Bank of Pakistan (SBP) kept the policy rate at 11.5% in its Monetary Policy Committee meetings in July and September 2026, citing the need to guide inflation towards the medium-term target range of 5-7%.

Headline inflation stood at 9.2% in July, rose to 11.1% in August and eased to 10.3% in September on a year-on-year basis, influenced by food and energy price pressures, higher global commodity prices linked to regional geopolitical developments and the pass-through of energy costs.

The company said the Federal Public Sector Development Programme (PSDP) for FY27 was allocated approximately Rs1tr, as part of a larger national development outlay, but the practical impact of these allocations continues to materialise gradually. Project awards remained constrained by fiscal priorities favouring completion of ongoing schemes, higher financing costs and delayed decision-making by public and private sector clients.

During the quarter, management maintained regular liaison with government departments, public sector organisations and private sector clients, and continued to evaluate potential projects with an emphasis on commercial viability, financial prudence and effective risk management.

Efforts also continued towards resolving outstanding contractual matters.

The company said it exercised strict financial discipline, keeping administrative and operating expenditures under control to preserve liquidity.

Management also continued efforts to recover outstanding receivables, retention monies and contractual claims relating to completed projects.

On the outlook, the board said it remains optimistic about the medium-term prospects of the construction sector.

Planned development spending under the national budget, together with continued investment in infrastructure, transport and logistics, is expected to gradually improve opportunities for contractors.

The company said the absence of new awards mainly reflects prevailing market and economic conditions rather than any reduction in its business development efforts.

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