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.
· 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
· 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
· Delivered 33.9 million man-hours with a total recordable incident rate
· Appointment of Tush Doshi as Chief Operating Officer of the EPC business
· Interim dividend of 5.5 US cents paid in October, an increase of 10% on
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."
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
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.
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
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.
For further information please refer to the Kentz website www.kentz.com or
Kentz Corporation Limited
Tel: +44 (0)20 3159 4000
Investors: Ronan Tyrrell
Media: Paul Youens
Tel: +44 (0)20 7920 3150
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
This information is provided by RNS
The company news service from the London Stock Exchange
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