Technip has released financial results for the second quarter of 2014 (Q2). Thierry Pilenko, Chairman and CEO, commented: “Technip’s second quarter was characterised by a substantial improvement in Subsea profitability, exceptionally strong order intake, and the start up of the Yamal LNG project in Onshore/Offshore.
“These elements enable us to improve the 2014 outlook for Subsea and give details on the expected level of operating profit in Onshore/Offshore for this year. Above all, our performance this year to date confirms the long term visibility we have in critical parts of our business”.
Operating income including non-current items was € 234 million in Q2, versus € 239 million in 2013. Non-current items reflect the disposal of non-core activities TPS and Seamec during the quarter.
Financial result in the second quarter of 2014 included € 17.6 million of interest expense on long tem debt and a € 0.5 million negative impact from changes in foreign exchange rates and fair market value of hedging instruments (compares with a € 3.3 million positive impact in the second quarter of 2013).
Capital expenditures for Q2 were € 93 million, compared to € 164 million in 2013. As part of its strategy to focus on core activities, Technip announced the sale of 51% out of its 75% share of Seamec for € 21 million, and of its TPS subsidiary.
Shareholders’ equity of the parent company as of 30 June 2014 was € 4228 million compared with € 4157 million as of 31 December 2013.
Onshore/Offshore delivered revenue growth of 5.4% and € 73 million of operating profit, but had a more challenging second quarter. As previously indicated, rapid mobilisation on Yamal LNG reduced the amount of general engineering work taken on. In addition, while older projects were closed down successfully, clients have been demonstrably slower to clear changes on other projects, reducing project progress.
Revenue expectations for 2014 are increased to between € 5.55 and € 5.80 billion. The base case outlook implies a 5% to 6% margin for the full year. There are three main factor impacting margin outlook – the continued impact of the mobilisation of Yamal LNG, the expected impacts of the behaviour of customers referred to above and the risks to the business of interruptions caused by geopolitics including sanctions. If assumptions on these issues were to prove insufficiently cautious, the company estimates the margin to be about a percentage point less this year.
Adapted from a press release by Emma McAleavey.
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