Highlights for Acergy S.A. include net operating revenue which increased 17% to $742 million and a gross profit which increased 20% to $150 million. It also includes an adjusted EBITDA(a)which increased 28% to $134 million delivering an Adjusted EBITDA margin of 18.0%. A net income from continuing operations increased 29% to $62 million and an offshore completion of major deepwater contracts including Moho Bilondo, Mondo, PRA-1 and Maari. Following significant growth in the first quarter and fewer awards in the second quarter backlog was $3.6 billion. The $300 million share buyback program was completed, reflecting the Board's long-term confidence in the business and focus on total shareholder returns. Dividends for the 2007 fiscal year of $0.21 per common share were approved by shareholders at the AGM. Post quarter end, the Acergy Piper commenced transit to Brazil for the Mexilhao Trunkline Project.
Jean P. Cahuzac, Chief Executive Officer, said, "We have delivered a strong financial result in a quarter of high activity. Operationally, we have successfully completed a number of complex and technically challenging deepwater projects demonstrating the quality of our assets and the technical ability of our employees to respond to the demands of the market. Across the industry, project awards continue to be delayed. This has somewhat impacted our backlog progression, following the material increases at the end of 2007 and early 2008. These project award delays, combined with the arrival of additional tonnage, may have further impact in the coming months. However, we believe this represents only a short-term challenge for ourselves and the industry and it should not be seen as indicative of change in the medium and long-term market prospects which remain robust."
Revenue expectations for the full year remain at $3.0 billion. The Adjusted EBITDA percentage margin is expected to show a moderate improvement over the result achieved for each of the full fiscal years 2006 and 2007, subject to the successful resolution of the Mexilhao negotiations. The effective rate of tax is expected to be approximately 35% at fiscal year end but with an expectation of quarterly volatility depending on the timing of the resolution of the ongoing tax audits and profit mix outturn. Capital expenditure is expected to be $300 million in commitments for fiscal 2008 with a cash expenditure of up to $325 million. This increase in capital expenditure largely results from new strategic decisions such as the Acergy Petrel purchase and the Acergy Eagle upgrade as well as some unanticipated cost increases.
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