Kentz Sees Strong Growth in 2014 with Record Order Backlog
LONDON, May 16 (Reuters) – British energy services firm Kentz on Friday was optimistic about growth prospects after seeing its backlog of orders rising to record levels, defying a slowdown in the industry.
Kentz, which provides engineering, construction and technical support for the oil and gas companies, had an order backlog at end of April of $4.5 billion, up from $3.1 billion in December 2013. Order intake in the first four months of this year reached $1.8 billion, more than the company's total intake in 2013, it said.
Oil and gas services firms, including Kentz' larger rival Petrofac and Norway's Subsea 7, have had to warn on growth prospects in response to cutbacks and project delays by oil companies which are tightening budgets to increase margins.
Kentz, has tended to take a more conservative approach to project risk than some rivals, with nearly 80 percent of its backlog consisting of cost-reimbursable contracts where the risk lies mainly with the customers.
Although customers have become more cautious on expenditure, Kentz's chief executive officer Christian Brown expected strong growth in the near term.
"All in all we feel pretty bullish in our ability to continue to identify and build the pipeline and convert it into a backlog," he told Reuters. "We're going to be up significantly this year on last year ... and frankly with the winds we've had this year already, I can see next year being even better."
Brown said most business opportunities have come from major gas infrastructure projects in Australia, where Kentz was awarded three contracts on the Ichthys liquid natural gas (LNG) project, as well as the Middle East and North America.
Kentz shares fell nearly 3 percent.
The company completed on May 2 the acquisition of Canadian oil and gas field infrastructure construction firm Alegro. That followed the acquisition of Valerus Field Solutions last year which allowed Kentz to expand into the Americas.
(Reporting by Ron Bousso, Editing by Paul Sandle and Jane Merriman)
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