Technip First-Quarter Profit Rises 7.6% on Record Orders
Net income rose to 112.2 million euros ($148.4 million) from 104.3 million euros a year earlier, Paris-based Technip said today in a statement. Sales jumped 23 percent to 1.76 billion euros.
Rising oil prices spurred exploration spending in the quarter, raising demand for Technip’s products such as flexible offshore pipelines. The company last month announced its biggest U.K. North Sea contract, an order to develop and install subsea infrastructure for the Quad 204 project at the Schiehallion field west of Shetland.
“The most striking aspect of the quarter was our very strong order intake,” Chief Executive Officer Thierry Pilenko said in the statement. “We continue to see a favorable orientation of our industry as operators’ investment plans remain very ambitious.”
The company said its order backlog reached a record 12.3 billion euros at the end of March, compared with 10.4 billion euros at the end of 2011. The quarterly order intake was 3.31 billion euros, more than double the 1.29 billion euros a year earlier.
Technip’s “mammoth” backlog in the subsea division is already close to expectations for the year, Kepler Capital Markets analyst Bertrand Hodee wrote in a report. Guidance for the division “could already look conservative.”
The shares, which have risen 18 percent this year, fell 2.4 percent to 87.03 euros as of 1:30 p.m. in Paris.
“Technip shares are not cheap,” Canaccord Genuity analysts including James Evans wrote in a note. Still, the results were positive and the company’s profit outlook could be revised higher, they said.
The oil-services company expects more projects will be started by oil companies to maintain and upgrade Norwegian and U.K. fields in the North Sea to extend their operating lives, Pilenko said today on a conference call. Other promising projects for Technip could be liquefied natural gas installations in East Africa as well as floating LNG platforms.
Technip confirmed full-year financial targets published in February. It’s seeking revenue of 7.65 billion to 8 billion euros in 2012, with a subsea operating margin of 15 percent and a margin for onshore-offshore of 6 percent to 7 percent.
The subsea margin was 14.7 percent in the first quarter, compared with 16.8 percent a year earlier. The combined onshore- offshore margin was 6.6 percent, down from 7.4 percent.
Europe’s largest oilfield-services company is Saipem SpA (SPM), which reported 3.1 billion euros of contracts awarded in the first quarter, bringing its total backlog to 20.42 billion euros.
To contact the reporter on this story: Tara Patel in Paris at email@example.com