Kentz Corporation (KENZ) - Interim Management Statement RNS Number : 8311Q Kentz Corporation Ltd 12 November 2012 Kentz Corporation Limited Interim Management Statement London, 12 November 2012: Kentz Corporation Limited ("Kentz" the "Company"), the holding company of the Kentz engineering and construction group ("the Group"), releases the following interim management statement for the period 1 July to 11 November 2012. Overview · Growth underpinned through new project awards together with natural growth on existing contracts · Backlog at the end of September 2012 was US$2.53bn (July 2012: US$2.54bn) (October 2011: US$2.38bn) · Prospect pipeline increased to US$13.1bn · Expect to deliver 2012 earnings in line with current market expectations · US$50 million shutdown services and operations support contract with Exxon Neftegas · Construction business unit recently won a further contract with Kenmare Resources on the Moma Sands mining project · Nearing completion on the EPC contract for the Gorgon construction village · Delivered 33.9 million man-hours with a total recordable incident rate of 0.22 · Appointment of Tush Doshi as Chief Operating Officer of the EPC business unit · Interim dividend of 5.5 US cents paid in October, an increase of 10% on 2011 Christian Brown, Chief Executive of Kentz, said: "We continue to perform well across our global operations and expect to deliver 2012 earnings in line with current market expectations. We are confident that our backlog and current prospects will continue to support double digit earnings growth in 2013. "Kentz's clients include a number of the world's leading natural resource companies, on some of the world's largest natural resource projects, and we have an excellent foundation on which to further globalise our Construction and TSS business units and increase both our capability and addressable market for our EPC business." Operational Update Our operations throughout 29 countries performed well in the second half of the year to date. In Western Australia, we are nearing completion of the EPC contract for the Gorgon construction village. We will follow this in mid-2013 with the completion of the EPC project for the Gorgon telecoms package on Barrow Island. Although activity on the Gorgon MEI contract has been below expectations, we do not expect any impact on our 2012 results and along with our client we continue to focus on first LNG at the end of 2014. Elsewhere in Australia, we continue to work on the QGC LNG and Ichthys LNG projects following awards earlier this year for our Technical Support Services (TSS) and EPC business units. We remain focused on opportunities in the region for projects that have received final investment decision (FID). Our operations in North and South America have produced solid results to date in 2012 where our Construction and TSS business units have been executing projects on the Kearl Oil Sands projects for Imperial Oil, the Aurora Mine Relocation (AMR) project for Syncrude, Barrick Mine in the Dominican Republic and on a number of other smaller projects. We continue to evaluate further opportunities in the Americas, in particular in Canada where considerable investments are expanding the development of the country's oil sands resources. We have a number of established operations across Africa, where our Construction and TSS business units remain strong. We maintain a strong relationship with Sasol in South Africa which we have developed over the past 30 years. We continue to execute projects under the five year shutdown management and execution services contract, signed in 2011, at Natref's flagship inland crude refinery in Sasolburg along with the provision of structural, mechanical, electrical, instrumentation and piping ("SMEIP") construction services for Sasol's GHHER expansion project. Our EPC business unit has recently been awarded a US$45 million contract with Scatec Solar, for the 75MWp Kalkbult Solar Photovoltaic ("PV") Project in the Northern Cape area of South Africa. This is a good award for our EPC business unit and a key project for South African energy that positions Kentz well for further work in the renewable space. In Mozambique, our Construction business unit recently won a further contract with Kenmare Resources on the Moma Sands mining project. We have been working on this project since 2008 and are pleased to have won further work as part of the on-going expansion project. We also continue to provide construction services to Vale on the Moatize Coal Plant following the successful completion of Phase 1 of this project earlier this year. The rapid growth of our businesses around the world has overshadowed the continued progress in the Middle East which is still a core and important market for Kentz and we continue to provide many services to important clients throughout the region. Our core markets of Saudi Arabia, UAE and Kuwait continue to produce many opportunities for Kentz, in addition to providing centres of engineering excellence, and we see further bidding activity in newer locations such as Iraq. Our recent award of shutdown services and operations support contract with Exxon Neftegas Ltd in Far East Russia reaffirms our ability to deliver projects successfully for our clients in Arctic conditions. We have opened an office in Moscow to enable us to focus on developments in western and northern Russia where the process of monetising the vast hydrocarbon resources in the Kara and Black Seas present new opportunities for Kentz. Health and safety As always, the health and safety of our 14,000 employees is of paramount importance to Kentz, to our operations and our ability to deliver successful projects for our clients. To the end of September, Kentz continued to execute projects with the highest standards of safety and delivered 33.9 million man-hours with a total recordable incident rate of 0.22. Financial position The Group continues to trade in line with expectations since interim results and expects 2012 to conclude in line with current expectations. Our balance sheet remains strong and continues to support the further development of the business. Outlook We continue to see project awards and natural growth on our existing contracts supporting the growth of our business. Backlog at the end of September 2012 was US$2.53bn (July 2012: US$2.54bn) (October 2011: US$2.38bn). Our prospect pipeline has grown to US$13.1bn, demonstrating the strength and agility of Kentz's business in the face of possible constraints on capital expenditure in certain sectors and regions. The recent well documented gas discoveries in East Africa have generated a lot of interest from the major oil companies. Given our successful track record in the region, our position as the largest general contractor in Mozambique and our proven success with LNG and gas projects, we are confident there will be significant opportunities for Kentz. Earlier this year, we signed a long-term training agreement with the Mozambique Ministry of Labour to train 500 local employees which is one demonstration of our strong commitment to this region. We remain confident of the market opportunities in both our end markets and the geographical areas that our three business units service. We remain confident that our 2012 earnings will meet expectations and that we will continue double digit earnings growth into 2013. Ends For further information please refer to the Kentz website www.kentz.com or contact: Kentz Corporation Limited Tel: +44 (0)20 3159 4000 Investors: Ronan Tyrrell Media: Paul Youens Tavistock Communications Tel: +44 (0)20 7920 3150 Matt Ridsdale Mike Bartlett Emily Fenton About Kentz Kentz is a global engineering specialist solutions provider, which serves a blue chip client base primarily in the oil and gas, petrochemical and mining and metals sectors. It is listed on the London Stock Exchange (symbol: KENZ). In the year ending December 2011, the company generated revenues of $1.37 billion and profit before tax of $79.4 million. Kentz has over 14,000 employees in 29 countries. Its three main business lines are; specialist engineering, procurement and construction (EPC) services, construction, and technical support services. It has a proven track record of delivering mechanical, electrical, controls and instrumentation engineering, construction and management services in some of the most remote locations on earth. This information is provided by RNS The company news service from the London Stock Exchange END IMSQFLFFLFFBFBF -0- Nov/12/2012 07:00 GMT
Kentz Corporation KENZ Interim Management Statement
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