Technip soars after major contract awards


Technip soars after major contract awards


PARIS (Bloomberg) -- Technip SA rose to the highest level in almost six months after saying it has received major contracts from oil companies even as industry spending slows.

“We have not yet seen a slowdown,” CEO Thierry Pilenko said today on a conference call, citing recent orders in Angola, Brazil, Indonesia and the North Sea and expected future revenue from Yamal LNG in the Russian Arctic.

A contract for the Kaombo project in Angola is worth $3.5 bn for Technip and partner Heerema, the company said in a statement. It also got a “very large” order for the country’s Block 15/06, while Yamal LNG is in the same size category.

That will help the company weather a slowdown in the oil and gas industry, with Total SA, Royal Dutch Shell Plc and Chevron Corp. among customers planning to rein in spending.

The stock rose as much as 7.4% to 82.20 euros, the highest since Oct. 30, and was at 81.95 euros by 10:38 a.m. in Paris.

Technip sees subsea division margins bouncing back this quarter after warning last year of an unusually low figure in the first three months as it started a plant in Brazil, completed Gulf of Mexico projects and increased maintenance.

It today beat analyst estimates with a first-quarter drop in net income to 67.2 million euros ($93 million) from a restated 116.2 million euros a year before, the Paris-based company said. The average of 10 analyst estimates compiled by Bloomberg was for net income of 62.4 million euros. The company affirmed its financial targets for this year and next.

Contracts for Yamal LNG may come “quite soon,” CFO Julian Waldron told analysts today on a call. “We expect a rebound in subsea margins in the second quarter.”

Technip’s order intake was 2.9 bn euros in the quarter, bringing its contract backlog to a restated 15.4 bn euros, according to today’s statement.

Subsea-division operating margins fell to 5.5% in the first quarter from 12.7% a year before. Onshore-offshore operations fell to 5.9% from 6.8%.

The oil services provider reiterated a goal for subsea margins of at least 12% in 2014. The division’s revenue will grow to 4.35 bn to 4.75 bn euros this year, it said, adding that the targets don’t take into account earnings from Yamal LNG. Onshore-offshore revenue will be 5.4 bn to 5.7 bn euros, with margins of 6 to 7%.

Related News ///


Comments ///

comments powered by Disqus