McDermott Reports Increase in Revenues
Offshore EPCI player, McDermott, has reported third quarter 2015 revenues of $805.9 million, an increase of $391.3 million, compared to revenues of $414.6 million for the prior-year third quarter.
Revenues for the third quarter of 2015 were positively impacted by strong revenue recognition at the INPEX Ichthys project, three Middle East projects, the Brunei Shell Petroleum project and the PB Litoral project in Mexico, the company said.
The Company reported third quarter 2015 adjusted net income of $26.7 million, or $0.09 per fully diluted share, excluding restructuring charges of $6.3 million and a legal settlement of $16.7 million, compared to an adjusted net loss of $25.5 million, or $0.11 per fully diluted share, excluding restructuring charges of $4.7 million in the prior-year quarter.
McDermott’s adjusted operating income was $52.5 million for the third quarter of 2015, excluding restructuring charges and the legal settlement. These results compare to the 2014 third quarter adjusted operating loss of $6.0 million, excluding restructuring charges. Operating income for the third quarter 2015 was positively impacted by loss recovery from the PB Litoral project, as a result of a confirmed contract extension, as well as the successful negotiation and conclusion of certain weather claims in the Middle East and improved marine utilization, McDermott added.
Cash provided by operating activities in the third quarter 2015 was $20.7 million, compared to a use of cash of $19.4 million for the third quarter 2014.
“This was a very strong quarter of new awards for the Company, predominantly in our core Middle East markets. The award of the first lump sum contract under the new Saudi Aramco Long Term Agreement in the quarter represents the single largest award in the history of our Middle East business and demonstrates that our ongoing emphasis on client engagement is generating tangible results. Additionally, we were successful in winning two new contracts in Qatar, bringing our awards in that country to four this year,” said David Dickson, President and Chief Executive Officer of McDermott. “Our continued focus on project execution is also generating positive results. During the quarter, we saw the successful sail-away of the PB Litoral structure from our Altamira yard and our marine campaign at Ichthys remains on schedule. While the macro commodity price environment remains challenging and our customers are assessing a lower for longer commodity price scenario, we continue to see project opportunities moving forward in the offshore brownfield markets and with our key Middle East customers.”
As of September 30, 2015, the Company’s backlog was $4.4 billion, compared to $3.1 billion at June 30, 2015. Of the September 30, 2015 backlog, approximately 73% is related to offshore operations and approximately 27% is related to subsea operations. Order intake in the third quarter 2015 totaled $2.1 billion and included the new LTA lump sum award from Saudi Aramco and two awards in Qatar.
At September 30, 2015, the Company was targeting to bid approximately $16.6 billion in projects that it expects to be awarded to the market through December 31, 2016. In total, the Company’s potential revenue pipeline, including backlog, was $23.6 billion as of September 30, 2015.