Galfar Engineering and Constructing Company (Galfar) has announced that it has secured four new operation and maintenance contracts worth OMR21.9 million, from the Public Authority for Electricity and Water (PAEW) across four governorates.   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, particularly if the contract for the OMR115 million award from the Petroleum Development Oman (PDO) announced last month is signed.   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 the company’s equity and offering negative ROEs for investors. We have a Sell rating on the stock. (MSM, Mai Attia, Sara Boutros)