Interim Management Statement - 18 November 2011
London, 18 November 2011: 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 17 November 2011.
A conference call for analysts and institutional investors to discuss the statement will be held at 09.30 GMT today, 18 November 2011. Please use the following dial-in-details:
Please dial: +44 (0)800 953 0102
Conference ID: 27319844
Trading
Backlog has increased to US$2.38bn at the end of October 2011, up from US$1.57bn at the end of June 2011, and provides visibility of work until 2015. The backlog represents a strong mix of projects with blue chip clients in the oil and gas, infrastructure and metals and mining sectors with a current profile of 55% reimbursable (Dec 2010: 23%), 12% unit rate reimbursable (Dec 2010: 18%) and 33% lump sum work (Dec 2010: 59%). Against the backdrop of economic uncertainty in certain regions of the global economy, Kentz is pleased to report that trading since July is in line with expectations and we remain confident of meeting market expectations for the full year.
Operational activity
Operations within each of our three global business units are performing well in the second half of the year and we continue to see opportunities for natural growth in current contracts. Demand for Kentz’s services has remained buoyant, particularly in our core discipline of structural, mechanical, electrical, instrument and piping Construction. We have also seen strong growth in our Asset Enhancement business with three downstream refinery shutdown management contracts scheduled for the second half of the year in South Africa alone.
This strong platform has resulted in Kentz being awarded a new US$2.3bn contract, in joint venture with CB&I (Kentz’s share is 35 per cent), for mechanical, electrical and instrumentation hook-up and commissioning workon Chevron’s Gorgon LNG Project in Western Australia. In addition, Kentz has also been awarded an EPCM framework agreement with Qatargas in Qatar, a US$32.7m contract for the reduction area electrical and instrumentation on the Ma'aden Alcoa Aluminium Joint Venture, and a contract with CB&I and Clough to execute the electrical and instrumentation, construction and commissioning completions for the PNG LNG Project's Hides Gas Conditioning Plant in Papua New Guinea.
Our focus for continued growth includes expanding our presence with existing clients and targeting new clients in our core sectors of upstream oil and gas, and metals and mining. Key target areas include upstream oil and gas projects in Iraq, and new opportunities with existing clients in Russia.
Safety
In the year to date Kentz has delivered over 46 million man-hours of work on projects in 28 countries worldwide, with a TRIR (Total Recordable Incident Rate) ratio of 0.32.
Significant milestones without a Lost Time Incident include 8.8 million man-hours at the Gorgon Construction Village fabrication facility in Thailand and over 5 million man-hours on the Moatize project in Mozambique.
Financial position
The Group’s cash position remains strong and continues to provide a sound financial base from which to support our growth plans. In September 2011, Kentz achieved inclusion in the FTSE 250 index following its transition to a Primary Listing on the Main Market of the London Stock Exchange in July 2011.
Outlook
Despite the uncertainties in the global economy, the Board of Kentz remains positive about the outlook for 2011 and 2012 and about the future prospects of the Company, which boasts a total pipeline of prospects in excess of US$9.77bn (US$8.89bn, June 2011).
We remain receptive to, and will carefully consider, any strategic investment opportunities that may arise in our sector, whether an organic capital investment or an acquisition. We will continue to adopt a prudent approach to evaluating any such strategic prospects, always bearing in mind that any investment made must be value-enhancing for our shareholders.
Commenting on today’s statement Hugh O’Donnell, Chief Executive Officer of Kentz Group, said:
“It has been an exciting period for Kentz with the award of a number of significant contracts and our graduation to the Main Market of the London Stock Exchange. Despite uncertainty in the world markets, we continue to work closely with core clients and partners on many notable projects in the sectors and regions in which we operate.
Our backlog of orders has increased by approximately 50 per cent in the year to date and we see significant opportunities in our immediate and medium term pipeline of prospects. This growth is under pinned by the global, end market and service diversity of our business. We continue to look to the future with confidence.”
Ends
Contacts:
Kentz Corporation Limited
Tel: +44 (0)20 3159 4001
Elizabeth Rous
Catríona Nugent
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 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 11,500 employees in 28 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