AGM Statement - 27 May 2011
London, 27 May 2011: Kentz Corporation Limited (LSE: KENZ), the holding company of the Kentz engineering and construction group, is hosting its Annual General Meeting, relating to the year ending 31 December 2010, at 10.30am today at The Great Room, Central Court, 25 Southampton Buildings, London WC2A 1AL...
At the meeting, Hugh O’Donnell, the CEO of Kentz will make the following statement:-
“Following a strong year in 2010 Kentz has continued to make good progress in 2011 and full year trading is anticipated to be in line with the Board’s expectations. At this stage we expect the weighting of revenues between H1 and H2 to be similar to the previous year.
The backlog as at the end of April 2011 was US$1,629m (31 December 2010: US$1,603m). The order intake between January and April 2011 was US$412m and approximately US$82m of this order intake has come from natural growth in existing contracts.
The Group remains focused on its core clients in the oil and gas, petrochemicals and metals and mining sectors. Our pipeline of current prospects has grown to in excess of US$3.70bn, through new and exciting opportunities with existing clients both in current and new areas of operation. We hope to convert a number of these prospects into backlog during the second half of 2011.
Safety remains the number one value for Kentz and I was pleased that many key clients attended our recent Annual Safety Conference to discuss the challenge of implementing the highest standards of safety in new areas. In existing operations Kentz recently achieved a significant safety milestone on one of our projects in Western Australia where we have delivered seven million man-hours of work without a lost time incident at the module fabrication facility.
The following update sets out some of our prospects, together with project activity from our three Global Business Units.
The Company continues to work towards the move to the Main Market of the London Stock Exchange in 2011.”
SpecialistEngineering, Procurement and Construction (EPC)
At the end of April, the backlog for the Specialist EPC business unit stood at US$717m (31 December 2010: US$780m). Revenue in the last quarter of 2010 was particularly strong in EPC, but a strong pipeline of opportunities particularly in the Middle East and Australasia positions us well to continue our growth in 2011.
In Qatar, Kentz has been awarded a US$24 million contract by Qatar Petroleum for the radar based security surveillance system at Ras Laffan Port Expansion Project. The contract duration is 14 months and is due to be completed by July 2012.
Elsewhere in Qatar, work is progressing on the US$36 million Qatar Petroleum contract at its Halul Island facility in Qatar, a US$85m contract on the Ras Laffan Refinery port project for Qatar Gas, and on the Qatar Gas Operating Company’s phase six LNG storage and loading facility in Ras Laffan Industrial City.
In Abu Dhabi, Kentz was recently awarded an EPC contract worth in excess of US$30 million by Abu Dhabi Gas Industries Ltd (GASCO) to replace the existing emergency shutdown system and associated field instrumentation at Habshan 0 and Habshan 1 plants.
Kentz’s activities are also on track on the US$30m ADGAS contract for the Storex Control Systems upgrade on the LNG, LPG, Sulphur storage and Jetty Loading facilities on Das Island. Work has also started on a WIP replacement on wellhead platform 15 for ZADCO.
Work is in final commissioning phase on the US$10m contract on the Isopentane unit at the Petrokemya facility, a SABIC company and is well underway on a separate US$22m contract for the sea water cooling systems in the Kemya facility, a joint venture between SABIC and ExxonMobil Arabia.
In South Africa, we have a number of ongoing capital and brownfield EPC projects including upgrade projects with Sasol through our engineering contractor agreement. The acquisition in February of RNE Engineering and Projects (Pty) Ltd, a South African engineering and project management company, supports the growth of activity in the region through an expanded engineering service offering to our clients.
In Australia, Kentz’s work continues to grow on the Gorgon LNG and Pluto LNG projects. We are currently bidding on additional scopes of work on these projects and other LNG projects set to go ahead in the region.
The situation in Yemen remains uncertain. Kentz has been liaising closely with its client and is committed to completing the project. We are in negotiations to agree more suitable terms for contract completion to reflect the current situation. Fabrication outside of Yemen is progressing well and work will resume in country as soon as is practicable.
Construction services
The Construction business unit backlog has also grown and at the end of April was US$670m (31 December 2010: US$658m). While Construction in the Middle East has continued to be less active, we have seen strong demand for our services in Australasia, Canada and Southern Africa.
Most recently Kentz was awarded a US$44 million Gas Heated Heat Exchange Reformer contract in South Africa. Kentz’s scope of work includes the structural steel, mechanical, electrical, instrumentation and piping (SMEIP) installation on the project.
In Mozambique, Kentz continues construction services on the Moatize Coal Project, worth approximately US$70 million. Elsewhere in Sub-Saharan Africa, Kentz is currently working on the Medupi power station contract worth in excess of US$250 million. In Madagascar, Kentz is providing construction services in the order of US$100 million for SNC-Lavalin on the Ambatovy Project. Our participation on the project has grown significantly with the award of additional work packages.
In the Middle East, Kentz provided construction services on the Saudi Kayan Petrochemicals Complex Project in Jubail, Saudi Arabia. This week, Kentz was awarded a procurement, construction and commissioning contract worth in the order of US$33.6 million by Bariq Mining Limited. Kentz's scope of work encompasses the structural, mechanical, piping, electrical and instrumentation works for Bariq Mining’s copper processing plant at its new copper mine at Jabal Sayid in Western Saudi Arabia.
In Qatar, work continues on Qatar Gas’s new LNG Berth 6 loading facility where Kentz is providing instrumentation, electrical and telecommunications services.
In Australia the Construction Services and Site Wide Specialist Instrumentation contracts for the Pluto LNG Project in Karratha continue. The combined value of work secured to date on the project is now in excess of AUD$120m. We see significant new opportunities for our Construction business in Australia, both in LNG and the mining and metal sectors.
In May, Kentz was awarded a further US$27m scope of work on an existing project in Alberta, Canada. The contract is expected to run from next month until July 2012.
In the Caribbean, we have mobilised on three construction projects for the Petrotrin Refinery in Trinidad & Tobago. We also continue to provide electrical and instrumentation installation services on the Trinidad Generation Unlimited project (TGU) 09 and have mobilised on the Barrick Gold contract in the Dominican Republic where Kentz is providing electrical and instrumentation construction services.
Technical Support Services
The Technical Support Services business unit backlog has grown strongly to US$242m at the end of April (December 2010: US$164m). This increased visibility in TSS work has been generated by the growth in opex opportunities with core clients; to provide asset enhancement services into the operating phase of their facilities.
In Qatar in early 2011 we signed a framework agreement to provide engineering design, construction supervision and procurement services for plant changes and projects by Qatar Shell GTL Limited. Subsequent to this we have gone on to win two further Brownfield Engineering Services contracts for both Rasgas LNG and for Oryx GTL. All of these facilities are located at Ras Laffan Industrial City.
In Kuwait, Kentz continues on the five year PMC support services contract, which includes the provision of engineering and consultancy resources and services with Fluor to manage national oil and gas projects for the Kuwait Oil Company (KOC).
Kentz continues to win and execute smaller service contracts with core clients for the provision of commissioning services on offshore modular process plants in fabrication, onshore LNG liquefaction, LNG re-gasification facilities and early onshore production systems, and see further opportunities as a number of other facilities are due to come on stream between 2011 and 2013.
In Canada, Kentz is providing site wide telecoms for the Kearl Oil Sands project. This includes the detailed design and procurement for all the telecommunications systems and site communication networks. At the Syncrude Mildred Lake Mine Replacement, 40 kilometres north of Port McMurray in Alberta, Canada, Kentz also has two scopes of work for the commissioning phase and the telecommunications systems required for the operational phase of this project.
Kentz is also supporting ExxonMobil through its Global Framework Agreement at three of its facilities in the US market and a number of other projects across the world.
In South Africa, Kentz was recently awarded a US$35 million contract by the National Petroleum Refiners of South Africa (Natref) at the Natref Crude Refinery in Sasolburg for shutdown management and execution over a five year period. We continue to provide construction and maintenance, shutdown and turnaround services to other Sasol facilities, including Engen, Hosef Fibres and Petro SA and several shutdowns are in the planning phase for Engen and a number of Sasol plants.
The pipeline for the Technical Support Services business unit looks very promising and Kentz’s track record of delivering technical solutions in remote and challenging locations places us well to capitalise on these opportunities.
Ends
For further information please contact:
Kentz Corporation Limited
Tel: +44 (0)20 3159 4000
Elizabeth Rous
Catríona Nugent
Evolution Securities Limited (Nomad and Broker)
Tel: +44 (0)20 7071 4300
Chris Sim
Tim Redfern
Neil Elliot
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 AIM market of the London Stock Exchange (symbol: KENZ). In the year ending December 2010, the company generated revenues of US$1.06 billion and profit before tax of US$67.5 million.
Kentz has over 11,000 employees in 27 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.
Please find further information on the Kentz website www.kentz.com