The company, which released its unaudited first quarter results this week, also said that its net operating income grew by nearly 40 percent--from $10.8 million to $27.6 million. Acergy credits a combination of higher activity levels, improved project performance, and higher asset utilization for the increase.
Net income from continuing operations was $20.4 million for the first quarter 2006, compared to $3 million in the same period in 2005. After including $20.5 million from discontinued operations, net income from all operations for first quarter 2006 was $40.9 million compared to $5.4 million for the same period in 2005.
The cash and cash equivalents position at quarter's end was $395 million, compared to $316 million at the quarter ended November 30, 2005. Total advance billings at the quarter end were $290.2 million compared to $268.8 million at the year end.<
"In a robust first quarter we delivered improved earnings over the same quarter last year," said Tom Ehret, Acergy's CEO. "Most of the assets in West Africa and the North Sea saw high activity levels. In addition, the growth in backlog during the period is encouraging, with bidding activity for West Africa, the North Sea, and Asia being particularly strong. Our focus for 2006 is on good project execution, the introduction of a Total Quality culture and the management of our capital expenditure program, to both rejuvenate and grow our asset base."
Acergy also released the following operating review:
Acergy Africa and Mediterranean The first quarter saw revenue growth over the same quarter last year with a high level of utilization of the Acergy Polaris and Acergy Orion on the Exxon Erha and EPC2B contracts in Nigeria; however a thruster problem on the Acergy Polaris reduced overall productivity. The Total Amenam II contract is now substantially complete. Bidding activity for SURF projects in West Africa remains high with a number of large bids in progress and others expected in the near term. The company expects that the greater part of these tenders will reach the award stage in early 2007.
Acergy Northern Europe and CanadaThe North Sea market continued to see greater activity than in previous years and a strong spot market, with order intake in the first quarter continuing at a high level. Favorable settlements for the 2005 portion of the Langeled project helped to deliver a profit for the region in what is traditionally a seasonally low quarter. The Acergy Piper, previously known as the LB200, has now started work on the second phase of the Statoil Langeled pipeline and the $85 million letter of intent for the Statoil Tyrihans pipelay project, scheduled for 2007, provides valuable follow-on work. The level of bidding for future work in the North Sea remains strong.
Acergy North America and Mexico Development of the SURF capability in this region remains our key focus. This region is now seeing a marked increase in the number of projects coming to tender for deepwater developments in the Gulf of Mexico. The engineering and project management team in Houston are now working jointly with the Acergy South America team on a number of projects.
The sale of the DLB801 was completed in the first quarter, resulting in an after tax gain on sale of $16.4 million reported in discontinued operations. As previously reported, ongoing delays to the Trinidad campaign led to the requirement for a third-party ship to be taken on hire to complete these projects, which are not now expected to be finished until the third quarter of 2006.
Acergy South America The two ships on long term contract worked well throughout the quarter with a minor operating interruption on the Acergy Harrier. Income from operations in the first quarter was lower than 2005 due to an increase in overhead costs arising from higher tendering activity and from the company's need to expand its operation in Brazil to manage the new Pertinacia charter. In a good quarter for contract awards, the Acergy Condor long term charter was extended for a further four years for $140 million from September 2006 and a Letter of Intent was received for the $145 million Petrobras PRA1 SURF contract for tie-in work.
Acergy Asia and Middle East Net operating revenue and income from operations for Acergy Asia and Middle East in the first quarter were significantly higher than in the first quarter of 2005 due to the release of contingencies after the successful completion of the Santos Casino project in Australia. SURF activities are continuing on the $36 million Petro Vietnam Dai Hung contract and the $11 million ConocoPhillips Kerisi SURF project in Indonesia, for which a letter of intent has recently been received. The Sapura 3000 continues to be actively tendered for projects between 2007 and 2009.
Current Trading Acergy reports that the backlog for continuing operations at quarter's end was $2.3 billion, of which $1.4 billion was for execution throughout the remainder of 2006. The company also held an additional $538 million in pre-backlog at the quarter end.
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