Kentz Grows Backlog for 1H, Outlook Positive for Onshore Projects

Kentz Corporation, the holding company of the Kentz Engineering and Construction Group, has announced its unaudited Group results for the six months ending June 30, 2009.

Financial Highlights

  • Revenue in the first half of 2009 was marginally up at US $328.8m (H1 2008: US $328.6m)
  • Profit before tax rose by 9.9% to US $18.5m (H1 2008: US $16.8m*)
  • Profit before tax margin increased to 5.6% (H1 2008: 5.1%*)
  • Cash increased in the first half of 2009 by 7.4% to US $165.7m (FY 2008: US $154.4m)
  • EPS (basic and fully diluted) 11.09 US$ cents up 0.9% (H1 2008: 10.99* US$ cents)
  • Backlog as of the end of June 2009 was up by 9.7% to US $1,100.9m (Dec 2008: US $1,003.8m)

* For the six month period ended June 30, 2008 stated before reflecting non-recurring costs arising from the admission of Kentz Corporation Limited to AIM

Operational Highlights

  • The reorganization of the Group into three Global Business Units which include Specialist EPC, Construction and Technical Support Services continues to be rolled out across the Group
  • Our scope of work has grown on both the Sakhalin I and II developments together with our Russian joint venture partners where Kentz volume of total work is forecast to exceed US $100m
  • Further involvement in the main process areas for the mega Shell Pearl gas to liquids project in Qatar where Kentz volume of total work is forecast to exceed US $300m
  • Successful completion of the Saudi Aramco Khurais construction project in Saudi Arabia in excess of US $60m
  • Continued participation on several Sipchem projects in Saudi Arabia including commencement of engineering and procurement services for the new Acetyls Polishing Plant with a total value of approximately US $150m
  • Successful completion of the approximately US $80m Rio Tinto Ilmenite project in Madagascar
  • Expansion of the provision of maintenance and turnaround services on new facilities in South Africa and within the Technical Support Services Global Business Unit with total work on hand in excess of US $30m.

Current Trading and Prospects

  • Backlog as at the end of August 2009 increased further to US $1,389.1m. The order book has grown over 38% since the year end December 2008
  • The order intake to the end of August was US $813m, including US $172m of organic growth
  • A substantial part of the growth in the order book has come from new onshore oil and gas developments in Australasia and the Middle East
  • Award of a AUD$500m (approx US $400m) contract from Chevron Australia for the design, supply and delivery of the construction village on the Gorgon LNG project in Western Australia through our subsidiary Kentz (Pty) Ltd, as announced on June 18, 2009. The contract was awarded to the Thiess Decmil Kentz (TDK) JV. Kentz is a one third shareholder in the TDK JV.
  • Award of a further contract from Chevron Australia for approximately AUD$150m (US $126m) for the engineering, procurement and construction of the telecoms and electronics systems for the Gorgon LNG project through our subsidiary Kentz (Pty) Ltd announced on August 21, 2009
  • Award of a contract valued at approximately US $146m to Kentz in Yemen for the engineering, procurement and construction of the utilities, process plant and infrastructure systems for a new central processing facility project with Global Process Systems, through our international arm Kentz Overseas Ltd.
  • Award of a contract in excess of US $30m to provide engineering, procurement and construction services for control systems modernisation from ADGAS in Abu Dhabi on its Das Island LNG facility, announced on July 23, 2009
  • Award of a contract in excess of US $26m with Rio Tinto in Southern Africa to carry out the supply and fabrication of the structural steelwork and piping, mechanical erection and the electrical and instrumentation installation for a tails treatment plant. This project falls under the Construction business unit.
  • Award of an EPC contract worth in excess of US $15m by Qatar Petroleum for the replacement of two existing glycol regeneration trains at its Fahahil Stripping Plant in Dukhan, Qatar. Announced on the September 4, 2009.
  • Award of a contract with AMEC worth approximately US $3.9m for engineering, design and procurement services on the ExxonMobil Imperial Oil Kearl Lake Oil Sands project in Alberta Canada.
  • Pipeline of future prospects is currently in excess of US $2.84bn, compared to US $2.15bn as at December 2008. Trading since June 30th, continues to be line with market expectations

Commenting on the results Hugh O'Donnell, Chief Executive of Kentz said, "We are delighted to report a strong performance for the Group in the first half of 2009. In particular, we are pleased to have grown the backlog substantially through our global capabilities and network of strong client relationships. The outlook remains positive for projects in the onshore oil and gas sector across a number of regions. Australasia and the Middle East are the largest growth areas and Kentz has achieved some noteworthy contract awards in both locations during the past six months."