KBR's 1H Revenue Increased 22% over First Half 2008
KBR announced that second quarter 2009 net income attributable to KBR was $67 million, or $0.42 per diluted share, compared to net income attributable to KBR of $48 million, or $0.28 per diluted share, in the second quarter of 2008.
Consolidated revenue in the second quarter of 2009 was $3.1 billion, an increase of 17% from $2.7 billion in the second quarter of 2008. Consolidated operating income was $137 million in the second quarter of 2009 compared to $90 million in the second quarter of 2008.
"I am pleased with the strong revenue and operating income growth over the same period last year, which contributed to KBR's solid earnings in the second quarter of 2009. Our cash balance increased $156 million during the quarter to $1.1 billion at the end of June 2009," said Bill Utt, Chairman, President, and Chief Executive Officer of KBR. "Backlog remained solid at $12.3 billion with the end-markets showing positive indicators towards projects moving forward over the next few years."
2009 Second Quarter Business Unit Results
Upstream business unit income was $65 million in the second quarter of 2009 compared to business unit income of $39 million in the second quarter of 2008. Business unit income in the second quarter of 2009 had positive contributions from various gas monetization projects, including the Pearl GTL, Skikda LNG, Gorgon LNG, Yemen LNG, and Escravos GTL projects, an offshore related project in the Caspian area, and several topside engineering projects. Business unit income in the second quarter of 2008 included a $24 million reduction in KBR's share of the estimated profits on an LNG project, which was subsequently offset by a gain of $24 million on a change order on the same LNG project in the fourth quarter of 2008.
Services business unit income was $29 million in the second quarter of 2009 compared to business unit income of $17 million in the second quarter of 2008. Business unit income in the second quarter of 2009 had positive contributions from BE&K, including continued work on power projects in Georgia and Texas, in addition to legacy construction and maintenance work in Texas, the offshore service vessels in the Gulf of Mexico, and an activated carbon project in Louisiana.
Total cash flows provided by operating activities for the second quarter of 2009 was $164 million. Total cash flows used in operating activities for the first six months of 2009 were $8 million.
Significant Achievements and Awards
- KBR announced a division of its Services business unit, BE&K Construction Company, was awarded a power contract by Progress Energy Carolinas, Inc. to provide construction services for a new natural gas-fired combined-cycle unit at the Richmond County Energy Complex located near Hamlet, N.C. BE&K will provide general construction services including installation of foundations, power generation and auxiliary equipment, piping, electrical, instrumentation, control and related systems for the completion of the facility, which is designed to improve electric system reliability in southern and eastern North Carolina.
- KBR announced the award by Esso Highlands Ltd (a subsidiary of Exxon Mobil Corporation) to the Eos Joint Venture (an unincorporated joint venture comprising WorleyParsons and Kellogg Brown & Root) an agreement covering Project Services for the PNG LNG Project. The Eos joint venture will facilitate requests from Esso Highlands to provide engineering, training, in-country support services and integrated project team services for construction and project management. This maintains Eos' engagement in the upstream component of the proposed PNG LNG development following the completion of Eos' current FEED services contract.
- KBR was recognized by the British Ministry of Defence (MoD) as the department’s top Key Supplier. KBR was awarded an 8.2 out of a possible 10 points in the MoD's performance assessment, making KBR the first Key Supplier to receive a score above an 8. KBR now sets the standard against which all other Key Suppliers of the MoD will be measured. The Performance Reviews, conducted between April 2008 and March 2009, assess the performance of 29 Key Suppliers and 97 MoD project teams. KBR's Government & Infrastructure business unit currently works on a number of high profile projects with the MoD, delivering infrastructure and other support services to the British military including: Contractor Logistics Support (CONLOG), Afghanistan Infrastructure Support and Temporary Deployable Accommodation programs.
- KBR announced that its consulting subsidiary Granherne was selected to take part in a conceptual study of StatoilHydro ASA's Gullfaks 2030 project to extend the production from the gas field. The award builds on previous conceptual studies undertaken by Granherne evaluating the possible installation of a subsea Wet Gas Compression and the tie-back of the Peon satellite production to the Gullfaks C platform.