(Source: Business Wire)
Regulatory News:
Technip: (Paris:TEC) (ISIN:FR0000131708):
SECOND QUARTER 2009
Revenue of â¬1,732 million, of which â¬848 million in Subsea
Group operating margin of 11.3%
Net Income rose 12.8% year-on-year to â¬116 million
Total net cash of â¬1,561 million
Backlog of â¬6,066 million (excludes two contracts signed for the Jubail refinery in July)
FULL YEAR 2009 OUTLOOK
Group revenue towards â¬6.4 billion at current exchange rates (previous outlook: â¬6.1 -- 6.4 billion)
Subsea revenue to show moderate growth (previous outlook: flat to moderate growth)
Subsea operating margin towards 18% (previous outlook: 16% - 18%)
Confirm year-on-year improvement of the Onshore / Offshore combined operating margin
? in million, (except EPS) 2Q 08 2Q 09 %change ex. FXimpact 1H 08 1H 09 %change ex. FXimpact Revenue 1,823.7 1,732.0 (5.0)% (4.2)% 3,640.5 3,301.0 (9.3)% (8.4)% EBITDA(1) 195.3 241.5 23.7% 28.5% 366.2 432.2 18.0% 23.7% EBITDA Margin 10.7% 13.9% 323 bp 10.1% 13.1% 303 bp Operating Income(2) 157.5 196.0 24.4% 29.0% 294.4 349.9 18.9% 24.4% Operating Margin 8.6% 11.3% 268 bp 8.1% 10.6% 251 bp Net Income 103.0 116.2 12.8% 192.9 215.3 11.6% EPS (?) 0.97 1.08 11.2% 1.83 2.01 10.1% -------------------------------------------------------------------------------
((1)) Calculated as Operating Income from recurring activities pre depreciation and amortization ((2)) From recurring activities -------------------------------------------------------------------------------
On July 22, 2009, Technip's Board of Directors approved the unaudited second quarter 2009 consolidated accounts. Thierry Pilenko, Chairman and CEO, commented: "Our second quarter performance illustrates well our 2009 priorities: good project execution, focus on profitability and selective order intake. We are accordingly able to improve our outlook for 2009. We now expect moderate growth in Subsea full year revenues and operating margins towards 18%, at the upper end of our initial outlook. Our Onshore / Offshore profitability continues to improve year-on-year. We now expect Group revenues towards â¬6.4 billion, also at the upper end of our initial outlook.
In the second quarter Subsea execution was again excellent, leading to revenues above expectations and a good operating margin. Onshore/Offshore, we continued to deliver on our major projects -- for example in Qatar we have handed over Rasgas 3, Train 6 and Qatargas 2, Train 5 to our clients and in Saudi Arabia we reached final completion on the Yansab ethylene plant. We continued to carefully manage our cost base and our cashflow, and used our strong balance sheet to acquire a replacement for our Apache pipelay vessel. Our backlog reflects our policy to maintain a balanced business portfolio. Subsea order intake has averaged over â¬550 million per quarter for the last three quarters. Onshore, we announced in July (for third quarter) two major awards for the Jubail refinery project. This is a project we know well, having done the FEED and worked closely with the clients for the past 3 years to align the overall project costs with their objectives.
With continued uncertainty in the global economic situation, our clients remain prudent in their final investment decisions and focused on reducing project costs. The combination so far this year of a recovery in oil prices and significant deflation on equipment, bulk, construction and vessel costs are rendering projects more economical and, as a consequence, our tendering activity has been increasing.
For the remainder of the year, we will continue to focus on project execution and target various contracts of all sizes which reflect Technip's technology strengths and on which we believe we have particular insight and value-added. In an environment which is still volatile Technip will stick to its strategic priorities, maintain investment in new assets and R&D focusing, on the Group's key differentiating attributes."
I. SECOND QUARTER 2009 REPORT
1. Operational Highlights
Subsea business segment continued to have excellent operational execution. Main events were:
Engineering and procurement for Pazflor, Angola, are ongoing,
White Rose North Amethyst, Canada, progressed well,
Offshore operations successfully completed on MA-D6 Phase II offshore India,
Successful fabrication and installation, in Brazilian deepwaters, of large diameter (11") risers for P-51 and P-53 platforms export system,
Cascade & Chinook will start offshore operations in the third quarter in the Gulf of Mexico,
Vessel utilization rate of 83% during the second quarter 2009 compared to 82% a year ago,
Flexible pipe production units continued to have good activity,
Manufacturing procurement costs reduction program is on track,
Ultra-deep water flexible pipe qualification program progressed well: offshore tests to be performed during second half of the year.
Offshore business segment main events were:
Akpo FPSO offshore Nigeria, was turned over to the client,
Execution on P-56 semi-submersible platform in Brazil is ongoing, construction progressed well,
Commissioning on P-51 semi-submersible platform in Brazil progressed well,
Mechanical completion certificate received from Petrobras on P-52 semi-submersible platform offshore Brazil,
Hywind platform offshore Norway was installed, ready for hook-up and start-up by StatoilHydro,
Diversification of our Pori yard in Finland continued resulting in satisfactory workload.
In the Onshore business segment:
Three out of six LNG Trains in Qatar have been handed over to the client: QatarGas 2 Trains 4 (4Q 2008) and 5, RasGas 3 Train 6. Remaining 3 Trains: RasGas 3 Train 7, QatarGas 3 & 4 Trains 6 and 7, progressed as planned,
LNG project in Yemen: first train nearing completion,
First train at the Saudi Arabian Khursaniyah gas plant is nearly completed, pre-commissioning is ongoing,
Client acceptance of Yansab ethylene production plant in Saudi Arabia,
Ramp up of production of kerosene, diesel and LPG at Dung Quat refinery in Vietnam,
Numerous other projects progressed:
All construction subcontracts for GdaÅsk refinery for Grupa Lotos in Poland awarded; project on schedule, Ready For Startup expected by year-end 2010,
OAG modules are being installed and connected on DÃ s Island, United Arab Emirates and pre-commissioning activities have started,
Construction activities are ongoing on the biodiesel plants for Neste Oil, Rotterdam and Singapore.
2. Order intake and Backlog
During the second quarter 2009, Technip's order intake was â¬873 million compared to â¬1,153 million in the first quarter 2009 and â¬1,408 million during the second quarter 2008. Order intake breakdown by business segment for the second quarter is as follows:
? in million 2Q 08 2Q 09 Subsea((1)) 658 46.8% 529 60.6% Offshore 67 4.7% 120 13.7% Onshore 683 48.5% 224 25.7% -------------------------------------------------------------------------------
Subsea order intake of â¬529 million comprised a variety of projects for the Gulf of Mexico, including the Telemark and Clipper Corridor field developments for Bluewater Industries, Caesar/Tonga field development for Anadarko and many mid-size contracts in the North Sea.
Offshore was awarded small and medium-sized projects in Brazil, North America and Asia Pacific.
Onshore order intake comprised several small and medium-sized projects, including a lump sum engineering, procurement and construction management services (EPCM) mid-scale liquefied natural gas (LNG) plant to be built in Yinchuan, China for the Ningxia Hanas Natural Gas Company, as well as a FEED for a nitrogen fertilizer complex in Peru for CF Industries.
Listed in annex II (d) are the main contracts that were announced during the second quarter 2009 along with their approximate value if publicly disclosed.
At the end of the second quarter 2009 Group backlog was â¬6,066 million, compared to â¬6,928 million at the end of first quarter 2009. Approximately 50% of the backlog is estimated to be scheduled in the next 6 months of 2009.
The backlog breakdown by business segment is as follows:
? in million June 30, 2008 June 30, 2009 Subsea((1)) 3,499 43.4% 3,116 51.4% Offshore 482 6.0% 374 6.2% Onshore 4,073 50.6% 2,576 42.4% -------------------------------------------------------------------------------
On July 10th, post quarter-end, Technip announced the award of two contracts for the Jubail refinery in Saudi Arabia. These major awards, which confirm Technip's leadership in grassroots refineries as well as our technological know-how and project management capabilities, will be executed by Technip's engineering centers in Rome and Paris with assistance from Technip's organization in the Middle East. The impact of these contracts on third quarter order intake is expected to amount to approximately US$3.2 billion.
(1) Concerning long-term frame agreements for offshore inspection repair and maintenance, Technip books in its backlog the estimated expected value of these activities for the current year only.
3. Capital expenditures
Capital expenditure for the second quarter 2009 increased to â¬174.7 million compared to â¬79.7 million a year ago and â¬58.2 million in the first quarter 2009.
This includes the acquisition of:
New state-of-the-art pipelay and construction vessel that will replace the Apache in 2010,
Technology for steam cracking furnaces (an application for small amplitude helical tubing).
4. Other
There was no change relative to prior disclosures in the TSKJ Nigeria matter.
Technip continues to cooperate with the relevant authorities.
II. SECOND QUARTER 2009 FINANCIAL RESULTS
1. Revenue
? in million 2Q 08 2Q 09 % change Subsea 603.1 848.4 40.7% Offshore 159.2 147.6 (7.3)% Onshore 1,061.5 736.0 (30.7)% Corporate (0.1) 0.0 nm Total 1,823.7 1,732.0 (5.0)% -------------------------------------------------------------------------------
Subsea revenue major contributors were MA-D6 phase II in India, Pazflor in Angola, Cascade & Chinook in the Gulf of Mexico, White Rose North Amethyst off the eastern coast of Canada,
Offshore revenue major contributors were P-56 semi-submersible platform in Brazil and Akpo FPSO offshore Nigeria,
Onshore revenue major contributors were Grupa Lotos refinery in Poland, RasGas 3, AKG2 and QatarGas 3 & 4 in Qatar, Yemen LNG project, Transco Fujairah and Offshore Associated Gas (OAG) projects in the United Arab Emirates.
2. Operating Income from Recurring Activities
? in million 2Q 08 2Q 09 % change Subsea 118.6 159.1 34.1% Offshore 8.9 8.8 (1.1)% Onshore 36.1 38.3 6.1% Corporate (6.1) (10.2) 67.2% Total 157.5 196.0 24.4% -------------------------------------------------------------------------------
Subsea EBITDA margin was 23.5% versus 24.8% for the same quarter last year and operating margin reached 18.8% versus 19.7% for the same quarter last year.
The combined operating margin for Onshore / Offshore was 5.3% compared to 3.7% a year ago.
Foreign exchange had a negative impact of â¬7.2 million on second quarter 2009 Group operating income from recurring activities.
Financial income on projects accounted as revenue amounted to â¬5.9 million during the second quarter 2009 compared to â¬7.7 million in the second quarter 2008.
3. Net Income
? in million 2Q 08 2Q 09 % change Income from sale of activities 0.0 (7.8) nm Operating Income 157.5 188.2 19.5% Financial charges (14.0) (22.7) 62.1% Income from equity affiliates 0.2 0.7 nm Income tax (40.2) (50.1) 24.6% Minority Interests (0.5) 0.1 nm Net income 103.0 116.2 12.8% -------------------------------------------------------------------------------
Income from the sale of activities amounted to â¬(7.8) million in the second quarter 2009 corresponding to a provision booked for a risk on a previously ceased activity.
Financial charges for the second quarter included a â¬15.8 million negative impact from currency variations and fair market value of hedging instruments, compared to a â¬3.7 million negative impact for the same quarter in 2008.
The effective tax rate in the quarter was 30% compared to 28% one year ago.
The average number of shares during the period on a diluted basis is calculated as per IFRS. For the second quarter 2009 this number of shares stood at 107,157,468.
4. Cash and Balance Sheet
? in million Net cash as of March 31, 2009 1,878.1 Operating cash flow 159.9 Working capital (79.7) Capex (174.7) Dividend payment (127.5) Others including currency (95.5) Net cash as of June 30, 2009 1,560.6 -------------------------------------------------------------------------------
As of June 30, 2009, the Group's net cash position was â¬1,560.6 million compared to â¬1,878.1 million as of March 31, 2009 and â¬1,644.6 million as of December 31, 2008.
During the second quarter 2009, cash generated from operations amounted to â¬159.9 million compared to â¬145.6 million for the same quarter 2008. Working capital movements contributed â¬(79.7) million.
Technip paid a dividend of â¬1.20 per share on May 12, 2009, following approval by Shareholders at the AGM on April 30, 2009. The total amount was â¬127.5 million.
Shareholders' equity as of June 30, 2009 was â¬2,657.4 million compared to â¬2,604.8 million as of March 31, 2009.
III. FULL YEAR 2009 OUTLOOK
Group revenue towards â¬6.4 billion at current exchange rates (previous outlook: â¬6.1 -- 6.4 billion)
Subsea revenue to show moderate growth (previous outlook: flat to moderate growth)
Subsea operating margin towards 18% (previous outlook: of 16% - 18%)
Confirm year-on-year improvement of the Onshore / Offshore combined operating margin
The information package on the second quarter 2009 results includes this press release and the annexes which follow as well as the presentation published on Technip's web site: www.technip.com
NOTICE
Today, July 23, 2009, Thierry Pilenko, Chairman and CEO, as well as Julian Waldron, CFO, will comment on Technip's results and answer questions from the financial community during a conference call in English starting at 10:00a.m. CET.
To participate in the conference call, you may call any of the following telephone numbers approximately 5 - 10 minutes prior to the scheduled start time:
France / Continental Europe: + 33 (0)1 72 00 09 84 UK: + 44 (0)203 147 4744 USA: + 1 866 907 5923 -------------------------------------------------------------------------------
The conference call will also be accessible via a simultaneous, listen-only audio-cast on Technip's website.
