McDermott tightens its loss, boosts revenues

McDermott, an engineering, procurement, construction and installation company, tightened its loss for the first quarter 2016 and saw a boost in revenues due to INPEX Ichthys and Saudi Aramco projects. 

According to McDermott’s statement on Thursday, the company’s net loss for the first quarter was $2.2 million versus $14.5 million in the corresponding period last year.

Excluding restructuring charges of $6.4 million and impairment loss of $32.3 million, the company  generated first quarter 2016 adjusted net income of $36.5 million, compared to an adjusted net loss of $4.1 million, excluding restructuring charges of $10.4 million in the prior-year first quarter.

Revenues during the quarter increased by $178.5 million totalling $729 million compared to the prior-year quarter and revenues of $550.5 million.

The key projects that contributed to McDermott’s revenue during the first quarter of 2016 were INPEX Ichthys and both Saudi Aramco’s 12 Jackets and Marjan GOSP.

David Dickson, President and Chief Executive Officer of McDermott, said: “The macro environment still remains uncertain, and recently one of our customers, Petrobras, decided to terminate the charter of our Agile vessel. As a result, we have recorded an impairment during the quarter reflecting the lack of opportunities for this vessel in our current revenue pipeline.”

As of March 31, 2016, the company’s backlog was $3.8 billion, compared to $4.2 billion at December 31, 2015. The company noted that of the March 31, 2016 backlog, approximately 71% is related to offshore operations and approximately 29% is related to subsea operations.

McDermott stated it expects in-year cash savings of $45 million due to completion of the Additional Overhead Reduction program.

The company also said on Thursday it was awarded three separate projects by a ‘major national oil company’ for the integrated engineering, procurement, construction, and installation (EPCI) services in multiple fields in the Arabian Gulf.

Offshore Energy Today Staff