Technip: Full Year 2004 Results; Net Income Up 36%
Euros in Millions, French GAAP (except EPS and E/ADS) 2004 2003 Change ---------- --------- ------- -- Backlog at December 31 6,779 7,180 -5.6% -- Revenues 5,141 4,711 9.1% -- Income from Operations (EBITA) 259 228 13.6% -- Net Income 5 (20) ns -- Net Income before Non-Operating Items and Goodwill Amortization 138.1 101.6 35.9% -- Fully Diluted EPS (EUR) 5.26 3.97 32.5% -- Fully Diluted E/ADS ($) 1.78 1.34 32.5%
On February 23, 2005, the Board of Directors of Technip approved the unaudited fourth quarter and audited full year 2004 consolidated French GAAP accounts.
Daniel Valot, Chairman and CEO, commented: "2004 was a year of success for Technip. In terms of financial performance, the Group had set demanding growth targets for its revenue and earnings. These were reached demonstrating the Group's resilience to challenging market dynamics such as the continuing weakness of the US dollar and rising raw material costs. At the same time, strong cash flow generation allowed us to further reduce gearing to 7% of equity.
"Several commercial breakthroughs at the end of 2004 and beginning of 2005 validate our strategy of targeting the high-growth, high valued-added markets. Contracts such as Qatargas II, Freeport, Kikeh and Horizon place Technip at the cutting edge of the gas processing, deepwater and non-conventional oil markets. At the beginning of 2005, our backlog represents about 16 months of revenues, a level which gives the Group good visibility on its future activity.
"Given our assumptions concerning the world currency markets, 2005 full year revenues expressed in euros should decline modestly. Our target for 2005 is to continue to improve our operational margin ratio such that, under comparable accounting methods, net income (before goodwill and non-operating items) should be at least as high as in 2004.
"In terms of business development, our prospects have rarely been as bright as they are today. All indications point to a rapid increase in hydrocarbon production capital expenditures in order to cope with both reservoir depletion and increased global energy demand, the latter coming primarily from developing countries. Given Technip's competitive strengths in terms of geographic and sector positioning, technological expertise, its ability to execute large projects and the quality of its teams, I have every confidence in our ability to achieve profitable growth over the coming years."
I. 2004 OPERATIONAL HIGHLIGHTS
The Group exercised for USD 28 million the purchase option on the Deep Pioneer, a construction vessel which was under lease agreement.
As part of its ongoing non-strategic asset disposal initiative, the Group sold four activities:
The combined 2003 revenues of these activities were EUR 221 million.
In addition, the Group sold two office buildings in Western Europe.
Technip's 2004 order intake was EUR 5,092 million. Listed below are the main contracts that came into force during the year along with their approximate values (Technip's share):
several contracts for hydrogen plants located in North America, the Middle East and Northern Europe (USD 257 million);
As of December 31, 2004, the backlog(1) amounted to EUR 6,779 million (equivalent to approximately 16 months of revenues) and was stable compared to EUR 6,828 million(2) at December 31, 2003. The breakdown by activity is as follows:
-- Offshore EUR 2,804 million -- Onshore-Downstream EUR 3,758 million -- Industries EUR 217 million.
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