Technip First-Quarter Profit Rises Amid Oil Project Orders
Net income rose to 116.2 million euros ($151.5 million) from 112.2 million euros last year, missing the 122 million-euro average estimate of seven analysts surveyed by Bloomberg. The company kept full-year financial targets. The shares rose the most in two months.
“We continue to see good opportunities for new orders in all our regions,” Chief Executive Officer Thierry Pilenko said today in a statement. The timing of some contract awards “remains uncertain.”
Technip, which supplies pipes, platforms and equipment to the oil and gas industry, has said spending plans by oil companies remains “robust.” The oil-services company earlier this month announced its biggest subsea contract, an order to develop an installation for the Moho Nord project offshore Republic of Congo.
Technip’s contract backlog reached a record 14.8 billion euros at the end of the latest quarter, 20 percent more than at the same time last year, according to today’s statement.
Technip rose as much as 4.7 percent in Paris to 82.73 euros, the biggest intra-day gain since Feb. 21. The stock traded at 82.66 euros at 10:11 a.m. local time.
Some projects are being delayed due to a “rethink” in their design to lower costs, Pilenko said today on a conference call. He cited BP Plc (BP/)’s Mad Dog 2 oil project in the Gulf of Mexico and Woodside Petroleum Ltd. (WPL)’s Browse LNG in Western Australia.
Cost inflation by suppliers working on projects is “not a huge issue,” he said.
Last year, Technip 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 has said.
Technip kept a target to increase revenue as much as 16 percent to 9.5 billion euros this year.
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.
In the first quarter the subsea operating margin was 12.8 percent compared with 14.7 percent while the onshore-offshore margin rose to 6.8 percent from 6.6 percent.
To contact the reporter on this story: Tara Patel in Paris at firstname.lastname@example.org