First Quarter 2016 Results Technip Announces Solid Start in 2016
Technip reports and order intake amounting to € 930 million for the first quarter 2016. The company announced that order intake remained at a low level, but its quality and diversity had been satisfactory, spread across both subsea and onshore/offshore projects.
Paris/France – Thierry Pilenko, Chairman and CEO, commented: “At the start of the year, Technip set out to execute our projects, sustain our balance sheet strength, reduce our costs and progress our strategy – all in response to the harsh and prolonged downturn in our industry. The first quarter shows that our teams are following through on these objectives."
In subsea, the manufacturing plants were busy and so were the vessels on West African offshore campaigns in particular driving a record 82 % vessel utilization rate for a first quarter. In terms of early stage work, the company won an important contract with Statoil for the development of the Trestakk field. We also renewed for a four-year period the contract to provide logistic support for Petrobras at Technip's Vitória base in Brazil. "In Onshore/Offshore, we started the 2016 campaign on Yamal with the first module shipments and early works continued for the upgrade and expansion of the MIDOR refinery in Egypt," Pilenko said.
During the quarter, SG&A expenses fell 11 % year-on-year. The French company ended the quarter with € %2 billion of adjusted net cash on the balance sheet slightly up compared to December 2015.
"With a low and volatile oil price and their cashflows under pressure, clients are more than ever focused on cutting their capex and costs to substantially below 2014 levels. Project awards are therefore being postponed and even cancelled, putting visible strain on some parts of our industry. Overall, we are seeing continued interest worldwide in investing, revamping and upgrading Downstream, but Upstream - even if we may see momentum on a few strategic developments – will be less resilient with front-end work only gaining momentum from late 2016 into 2017," the CEO commented.