Acergy profits rise
OSLO, July 9 (Reuters) – Norwegian oilfield engineering group Acergy posted a 10 percent rise in pretax profit for the second quarter on Wednesday, roughly matching forecasts, and said medium and long-term fundamentals remained robust.
Pretax profit rose to $99.6 million in the three months to the end of May from $90.7 million in the same quarter last year.
The result was just above an average forecast of $99 million in a Reuters poll of 13 analysts. Operating profit of $106 million beat analysts’ average forecast of $96 million, and the shares initially jumped as much as 7 percent before cooling off.
“The figures beat our expectations across the board for the quarter and were better than consensus,” said Handelsbanken analyst Haakon Amundsen. But he added that the company had slightly downgraded its short-term outlook.
Soaring oil prices have spurred petroleum activity around the globe, boosting the oilfield services sector, including providers of engineering and construction like Acergy.
“Market visibility is good, and the medium and long-term fundamentals for our business remain robust,” Acergy S.A. said in a statement, repeating its guidance for full-year revenues to reach $3 billion.
“We have delivered a strong financial result in a quarter of high activity,” Chief Executive Jean Cahuzac, who took over as CEO in mid-April, said in the statement.
Acergy said global growth in energy demand, new technologies to extend the life of fields and the need to access resources in ever more challenging environments continued to underpin the need to develop more petroleum reserves.
“Within this positive outlook there are short-term cyclical factors which may adversely affect our business, including the irregular award of contracts,” it said.
Acergy shares trimmed gains and traded up 3.6 percent at 107.75 crowns by 1305 GMT, outpacing the Oslo benchmark index, which was up 1.4 percent.
Acergy said delays in project awards across the industry held back its orderbook, and together with the arrival of more tonnage for offshore work, could affect results in the months ahead. Acergy has a fleet including pipe-laying vessels.
“However, we believe this represents only a short-term challenge for ourselves and the industry and it should not be seen as indicative of change in the medium and long-term market prospects, which remain robust,” Cahuzac said.
The backlog of orders fell to $3.65 billion by the end of the second quarter from $3.97 billion at the end of the first quarter, but were up from $3.03 billion a year ago and above analysts’ average expectation of a dip to $3.62 billion.
The company said it expected its profit margin on adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) to show “a moderate improvement over the result achieved for each of the full years 2006 and 2007”.
It said that depended, however, on the successful resolution of talks on the delayed Mexilhao pipeline project in Brazil.
Acergy had said earlier guided for a 1-2 percentage point improvement in 2008 in its adjusted EBITDA margin from 16.5 percent last year.
After the end of the quarter, the Acergy Piper vessel headed for Brazil to begin work for Petrobras on the Mexilhao trunkline, Acergy said, but added: “Resolution of the claim regarding this (Mexilhao) delay is still ongoing.”
Major deepwater projects were completed during the quarter in West Africa, Brazil and New Zealand, the company said.