Technip posts net income of €67.2 million for Q1 2014

Technip’s Board of Directors has approved the consolidated financial results for the first quarter of 2014. The results revealed a 23.3% increase in revenue; however, net income fell by 42% due to the setting up of a new manufacturing facility in Brazil and the completion of several projects in the Gulf of Mexico.

Q1 2014 highlights

• The company posted an order intake of €2.8 billion, including major subsea awards such as Block 15/06 in Angola, bringing contract backlog to €15.4 billion.
• Revenue increased by 23.3% from €2 billion in Q1 2013 to €2.5 billion in Q1 2014.
• EBITDA stood at €180.6 million in Q1 2014, an 18.5% decrease from €221.6 million in Q1 2013.
• Net income fell by 42.2% to €67.2 million in Q1 2014, from €116.2 million in Q1 2013.
• Operating margins in the subsea division fell to 5.5% in Q1 2014, compared to 12.7% in the same period a year earlier. This was attributed to longer vessel maintenance and costs from setting up a new manufacturing facility in Brazil.
• Operating margins in the onshore/offshore division fell from 6.9% in Q1 2013 to 5.9% in Q1 2013.

Objectives for 2014

• Subsea revenue is expected to grow to between €4.35 and €4.75 billion in 2014, with an operating margin of at least 12%.
• Onshore/offshore revenue is forecast to grow to between €5.4 and €5.7 billion, with an operating margin of approximately 6 – 7%.

Thierry Pilenko, Chairman and Chief Executive Officer of Technip, commented on the results: “Revenue in both subsea and onshore/offshore segments was above expectations in the first quarter and operating margins were in line.

“In subsea, we started commercial production at our new flexible pipe facility in Açu, Brazil. We continued to complete the series of projects in the Gulf of Mexico and ramp-up activity on newer, large projects worldwide. In onshore/offshore, we handed some older projects over to clients and also started an intensive period of critical execution phases on newer projects, which will continue over the next several quarters.

“Concerning our investment programme, we held the naming ceremony for the two 550 t flexlay vessels in South Korea and signed an agreement to take a stake in offshore technology company, Kanfa, in Norway. We also signed agreements for the disposal of several non-core assets.

“Order intake has been very strong in subsea, with over €2 billion of new orders, including a very large project in Angola on the Block 15/06 development for product supply and installation with offshore  phases  starting  already in  2014.  In the  onshore/offshore  segment,  a  number  of smaller and medium-sized projects, for example a medium-sized EPC in Brunei or technology FEEDs, contributed to over €700 million of new orders. We continued to assist multiple clients in the engineering and design of their projects, at both the early and redesign phases. At the end of the quarter, our backlog was €16.3 billion taking into account significant currency effects and before adjustment for IFRS 10, 11 and 12. Our total backlog of €15.4 billion reflects the application of the new IFRS standards. An estimated €7 billion is for execution in 2014.

“Although our clients remained focused on optimising their investments on both existing and new projects, we continue to see a determination on their part to move ahead with key projects.”

Adapted from press release by Rosalie Starling

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