Technip Raises Dividend, Sees Growth as Profit Tops Estimate
Technip proposed a 2012 dividend of 1.68 euros, up 10 cents from a year earlier. Net income slipped 2 percent to 147 million euros ($194 million) last quarter, beating the 144.5 million- euro average estimate of seven analysts surveyed by Bloomberg.
“We are very confident about our markets which we believe are robust and growing,” Chief Executive Officer Thierry Pilenko said today on a conference call. Sales and profit will increase in 2013 as “large” oil and gas projects start. North America’s petrochemicals industry is also “active,” he said.
Technip rose as much as 2.5 percent, the highest intraday price in two weeks, and traded up 1.3 percent at 80.01 euros as of 12:52 p.m. in Paris.
The company and its peers have reported higher equipment orders as rising energy prices drive investment in hard-to-reach oil prospects. Brent crude averaged $111.68 a barrel last year, a record high, spurring European producers such as Royal Dutch Shell Plc (RDSA) to raise exploration budgets.
Technip, Europe’s largest oil-services provider after Saipem SpA (SPM), had a record order backlog of 14.3 billion euros at the end of the last quarter, up from 13.5 billion euros for the previous three months. While it has tried to keep its portfolio diversified, a selective approach is “critical,” Pilenko said.
Technip supplies pipes, platforms and equipment to the oil and gas industry, and builds plants for petrochemicals producers. Last year, it bought Shaw Group Inc.’s Stone & Webster technology and energy businesses, gaining 1,200 engineers and researchers.
The acquisition has expanded Technip’s market in North America, and it may bid for five or six petrochemical plant contracts in coming years, Pilenko said at a press conference.
“The North American market has surprised everyone,” he said. “Five years ago the market was the most expensive in which to build and operate petrochemical plants, and now it’s the cheapest” because of affordable energy to run the plants.
Technip expects to increase revenue as much as 16 percent to 9.5 billion euros this year, the Paris-based company said in a statement. Spending by oil companies on exploration and production will expand at a “double-digit” rate, Pilenko said.
Technip expects the operating margin in its subsea division to hold steady at about 15 percent this year, while the onshore- offshore margin will be 6 percent to 7 percent, compared with 7 percent in 2012. The company will maintain investment at about 519 million euros.
To contact the reporter on this story: Tara Patel in Paris at firstname.lastname@example.org