Technip: 'Contrasting Results' for 2007, 'Better Visibility' for 2008
Technip's Board of Directors has approved the audited full year 2007 consolidated accounts.
Thierry Pilenko, Chairman and CEO, commented: "Technip ends 2007 with contrasting results but starts 2008 on surer footing and with better visibility. First, the excellent performance of the Subsea business (SURF), which achieved a record 15.8% operational margin in 2007 with four consecutive quarters of continuous improvement. We believe this regained momentum reflects our technological leadership and our vertically integrated business model.
Second, the financial status of the Onshore legacy projects has been clarified. These projects which include the four gas projects in Qatar won in the 2004 - 2006 period were affected by unpredictable costs escalation and a severe shortage of resources during the construction phase. As a consequence we recognized significant charges in 2007 which had a material impact on our margins. These measures on completed, nearly completed and ongoing projects significantly reduce the uncertainty of the outcome of these projects. Third, our order intake grew 17% in 2007, and at year end our EUR 9.4 billion backlog is more balanced: the Subsea business, our most profitable segment, represents 37% of the backlog compared to 26% a year ago, the relative weight of the different regions is more homogeneous thanks to our growth in Europe and Africa and we increased the proportion of the lower-risk projects in the Onshore portfolio.
On the assets side, we accelerated investments in the second half of 2007 in order to fuel the growth of Subsea. We completed the expansion of the existing manufacturing capacity in Brazil and in France, started construction of a new flexible pipe plant in Asia, added two vessels to our fleet and launched the fabrication of two additional vessels for a total investment of approximately EUR 1 billion over the 2007 to 2010 period.
The fundamentals of our industry remain very strong with good visibility both onshore and offshore extending the growth trend beyond the end of the decade. From new deepwater developments to life extension of mature fields, from existing refinery upgrades to grass-root oil or gas projects, Technip is extremely well-positioned to take advantage of this market and has the right technical skills and a solid balance sheet to support growth with a strong focus on profitability.
In this environment Technip has set its 2008 financial goals as follows: Group revenue around EUR 8 billion, with 10% revenue growth in the Subsea segment, and therefore a Group operating profit above 7.3%.
Confident in our capacity to create long-term shareholder value, the Board of Directors recommends raising our 2007 dividend per share to EUR 1.20."
At EUR 2,101.2 million, fourth quarter 2007 Group revenue was up 6.0% compared to the fourth quarter 2006.
During the fourth quarter 2007, the 9% depreciation of the US dollar and associated currencies, had a negative impact of EUR 78.9 million on the Group revenue.
As a consequence of the EUR 270 million charges recorded on Onshore-Downstream projects in the fourth quarter 2007, Group operating income from recurring activities is a loss of EUR 108.0 million, compared to a profit of EUR 113.8 million recorded during the fourth quarter 2006.
During the fourth quarter 2007, Group operating income represented a loss of EUR 108.8 million, compared to the EUR 113.8 million profit recorded a year ago.
Full year 2007 Group revenue was EUR 7,886.5 million, up 13.9% compared to 2006.
In 2007, Technip's order intake reached EUR 7,197.8 million compared to EUR 6,143.1 million in 2006.
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