Galfar Engineering and Constructing Company (Galfar) has announced that it has secured a new contract award worth OMR115 million from Petroleum Development Oman (PDO). The scope of works includes the construction of a new central processing facility in Yibal khuff area, which will involve civil, mechanical, electrical, and instrumentation work.   Our numbers incorporate OMR200 million in new awards for 2016, +50% Y-o-Y, coming from a very low base of OMR134 million in 2015 (2012-2014 average: OMR325 million). The inflow of new awards YTD has been slow, country-wide and to Galfar. That said, we shall monitor the evolution of awards to Galfar for a possible upward revision to our 2016 new award estimate.   We note that Galfar’s depleted equity base and high leverage (net debt-to-equity at 2.4x, and net debt-to-market cap at 6.6x in December 2015) give the company a higher risk element vis-à-vis its peers. We expect the company to report net losses for the coming three years, further straining its equity and offering negative RoEs for investors. We have a Sell rating on the stock. (MSM, Mai Attia, Sara Boutros)   Galfar: OMR0.061 as of 15 March 2016, Rating: Sell, FV: OMR0.041 per share, MCap: USD67 million, GECS OM / GECS.OM