UPDATE 1-Kentz bucks weak oil services trend with profit rise

Mon Mar 24, 2014 5:12am EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

(Adds CEO and analyst comment, share price)

LONDON, March 24 (Reuters) - British energy services firm Kentz achieved a double-digit percentage rise in earnings last year, in line with expectations, bucking the trend of rivals hit by falling profits as oil companies cut spending.

Kentz said on Monday it had proven resilient to weakness in the sector due to a spread of business across different regions including Africa, the Middle East and Australasia, as well as a mix of clients from national, global and independent oil firms.

It also tends to take a more conservative approach to project risk than some rivals, with nearly 80 percent of its backlog consisting of cost-reimbursable contracts where the risk lies mainly with the client.

Executives at larger peers Petrofac and SNC-Lavalin have criticised this low-risk model as no longer viable, but it seems to have worked well for Kentz so far.

The company had a rollercoaster year in 2013 which saw it resist takeover approaches from two bigger rivals to later complete an acquisition of its own, buying Valerus Field Solutions, and expand its reach into the Americas.

"We fired on all cylinders last year ... We executed our strategy I think flawlessly," Chief Executive Christian Brown told Reuters.

Kentz reported profit before tax for 2013 of $118 million, up 12.6 percent on the previous year, from revenue of $1.66 billion. The company's shares were up 4 percent in morning trade.

Brown said he expected strong growth this year with earnings per share reaching $1, an increase of 47 percent from 2013.   Continued...