Acergy S.A. announced financial results for the fourth quarter and full year which ended on November 30, 2007.
Net operating revenue from continuing operations for the fourth quarter of 2007 increased 23% to $754 million (2006: $613 million) due to significantly higher activity levels in West Africa and Brazil.
Gross profit increased 32% to $158 million (2006: $119 million) as the volume and quality of the company's project execution during the quarter improved.
The Mexilhao Trunkline Project delivered a disappointing performance during the fourth quarter, with a $27 million EBITDA impact. This non-SURF project suffered as a result of delayed mobilization from Europe to Brazil leading to significantly higher costs for two local subcontracts covering the pipe carrying logistics and the chartered barge required for the shoreline approach. At year end, this project was only 12% complete.
Net operating income from continuing operations for the fourth quarter was $94 million (2006: $73 million). This 29% increase was due to a higher level of activity and improved project performance partially offset by higher SG&A expenses.
Income from discontinued operations for the fourth quarter was $1 million (2006: $6 million loss). The net loss from all operations was $19 million (2006: net income of $68 million).
Net operating revenue from continuing operations for the full year increased 25% to $2,663 million (2006: $2,124 million) primarily driven by SURF activity in West Africa and Brazil.
Gross profit increased 26% to $541 million (2006: $429 million) due to improved execution and strong contributions from major projects, including Greater Plutonio, Moho Bilondo, the CNR Frame Agreement, Tyrihans and Eldfisk, resulting in a stable gross margin percentage, despite the impact of the Mexilhao Trunkline Project.
The company's share of net income from the non-consolidated joint ventures decreased to $31 million (2006: $41 million).
SG&A expenses increased 24% to $228 million (2006; $184 million).
Net operating income from continuing operations increased 24% to $357 million (2006: $287 million).
Net income from continuing operations was $148 million (2006: $221 million) reflecting the higher level of activity and strong project performance offset by the loss on the Mexilhao Trunkline Project and the higher tax charge. Net income from all operations was $154 million (2006: $237 million).
At year end, Acergy S.A. held directly 6,056,407 treasury shares representing 3.11% of the total issued shares, as well as indirectly holding 879,121 treasury shares, representing 0.45% of the total issued shares.
The board proposes to increase the dividend by 5% to $0.21 per share (2006: $0.20 per share) subject to shareholder approval at the Annual General Meeting.
In 2007 the group sustained a tax charge of $200 million arising from substantial provisions following revision of estimates relating to prior year tax positions and a high effective rate of tax attached to current activities, principally in the French based Africa and Mediterranean region.
Recent contract awards for Block 15 and Pazflor have been contracted in the Africa and Mediterranean region under more effective contractual arrangements and are not expected to repeat the inefficiencies leading to the higher tax charge in this region in 2007.
"During the year, we returned cash to our shareholders in the form of $147 million of share buybacks and a dividend of $37 million," Tom Ehret, CEO, said. "Today we have announced a 5% increase in the 2007 dividend and we continue our share buyback program.
"The fundamental drivers of growth in our markets are as strong as ever. We have a leading position in the technically complex end of a market that will see growth in the foreseeable future, driven by our clients capex programs, especially in deepwater and remote environments where Acergy has an unrivalled track record."
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