ShawCor Reports Profit Drop in Q1 2014

ShawCor Ltd., a global energy services company specializing in products and services for the pipelines and petrochemical segments of the oil and gas industry, has released results for first quarter 2014.

First quarter revenue of $479.1 million increased by $24.4 million, or 5%, from $454.7 million reported in the first quarter a year ago. Revenue also increased by 17% from the $409.8 million reported in the fourth quarter of 2013.

EBITDA in the first quarter of 2014 was $106.1 million, increased by $2.0 million, or 1.9%, from the first quarter of 2013 and also increased by $49.0 million or 86% from the fourth quarter of 2013.

Net income (attributable to shareholders of the Company) in the first quarter was $61.9 million (or $1.03 per share diluted) compared with net income of $70.6 million (or $1.01 per share diluted) in the first quarter of the prior year.

The first quarter 2014 highlights:

– Equity investment in ZEDI Inc.;

– Moho Nord Subsea Project in Congo;

– South Stream Offshore Pipeline;

– Retirement of Bill Buckley and Appointment of Steve Orr as CEO;

– Acquisition of Scotia Automated Inspection Service.

Bill Buckley, Chief Executive Officer of ShawCor Ltd. remarked: “Our first quarter 2014 financial results showed a significant increase over the level reported in the fourth quarter and also exceeded the exceptional performance reported in the first quarter a year ago. The improvement in margins over the fourth quarter resulted from higher revenues in all of our global regions combined with particularly strong gross margins at our Asia Pacific region where we benefitted from excellent execution performance on the Inpex Ichthys Flowlines project.”

Buckley added: “With the Inpex Ichthys Flowlines project scheduled for completion in the second quarter, we continue to expect that revenue and earnings in the second half of this year will decline compared with the performance from the first quarter. In order to achieve future revenue growth, the Company is focused on securing a significant share of the large projects that are currently in the outstanding bid stage, as well as pursuing organic growth and acquisition initiatives in the Company’s pipeline services and composite pipe businesses. With the current backlog of $642 million and the value of outstanding bids exceeding $800 million, the Company has excellent prospects for revenue and earnings growth in 2015 and beyond.”

In the ShawCor’s 2013 year end Outlook, the Company stated that it expected revenue and earnings to decrease in 2014 in comparison with the record results of 2013. This expectation continues and is premised on the fact that in 2013, revenue from the Company’s Asia Pacific region had been enhanced by the execution of the $400 million Inpex Ichthys gas export pipeline project, the largest single project in the Company’s history and a project size that will not be replicated in 2014.