UK: Kentz Sees Profits Rise

Kentz Sees Profits Rise

Kentz Corporation Limited, the holding company of the Kentz engineering and construction group, today announced its unaudited group results for the six months ending 30 June 2013.

Financial Highlights

  • Record backlog of US$2.8 billion up 12% since June 2012 (US$2.5 billion) with 80%1reimbursable contracts
  • Revenue up 2% to US$775.2 million (1H 2012: US$759.5 million)2
  • Adjusted profit before tax3 of US$55.4m up 8%; reported profit before tax up 3% to US$52.7m (1H 2012: US$51.2m)
  • Adjusted profit before tax3 margin increased to 7.1%; reported profit before tax margin of 6.8% (1H 2012: 6.7%)
  • Adjusted EPS3 (diluted) 33.25 US¢ up 23%; reported EPS (diluted) 31.01 US¢ up 15% (1H 2012: 27.06 US¢)
  • Gross cash4 balance of US$219.3m at 30 June 2013 (Dec 2012: US$229.8m)
  • Interim dividend of 6.6 US¢ per share; up 20% from 2012 interim dividend

Operational Highlights

  • Order intake up 11% to US$979 million (1H 2012: US$882 million); good balance between natural growth and new awards
  • Strong success in Canada with approx. US$200m of new awards
  • 47% revenue growth in Technical Support Services unit during the first half of 2013; Kentz’s highest margin business unit
  • Extended global presence with key contract awards in new territories of Alaska and Colombia with further bidding opportunities identified
  • Colombia represents first entry into the rapidly growing Latin American market
  • Successful completion of the Gorgon Construction Village project which commenced in 2009
  • Pipeline of opportunities has risen 17% over 12 months to US$15.0 billion (June 2012: US$12.8 billion); maintained a win rate of one in three bids for the period

Current trading and outlook

  • A record US$4.5 billion of bids submitted during Q2 2013 with continued momentum into 2H; Increased bidding activity across all regions and business units
  • Three long-term EPC framework agreements signed in Southern Africa with blue-chip international companies
  • New contracts awarded recently on Sakhalin Island for
  • services including design and installation of electrical infrastructure and
  • mechanical and piping brownfield construction works
  • The Board remains confident that the increase in bidding activity currently being seen will convert into a strong second half performance

Commenting on the results Christian Brown, Chief Executive Officer of Kentz said: “The first six months of 2013 has seen one of the busiest periods of bidding activity ever undertaken in Kentz and this momentum and level of activity has continued into the second half of the year. We continue to be excited about the increasing level of opportunities that exist for our diverse business throughout the world. Our blue chip clients continue to invest and demand the services that Kentz provide in engineering, constructing and maintaining some of the world’s largest assets in the energy and resource sector.

“Our commitment and responsiveness to our clients is highlighted as an important factor of our success and our workforce throughout the world is committed to ensuring that our clients’ needs are fulfilled. The first half has seen our relationships with clients open up new regions for our business, and regions such as Africa and the Middle East continue to benefit from our long-standing presence, with further long-term contracts from satisfied clients. I look forward to updating you on the remainder of 2013 where we expect further contract and operational successes which will provide a firm grounding for 2014 onwards”.

LNG World News Staff, August 27, 2013


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