Demand for oil bolsters outlook of Kentz

INCREASING global demand for oil has strengthened the already upbeat operational outlook of the Co Tipperary-based engineering and construction services company, Kentz.

The international AIM-listed company – which is headquartered in Clonmel and chiefly serves clients in the oil and gas exploration sector – said yesterday, via a trading statement ahead of the publication of its 2009 financial results in late March, that last year saw it perform solidly, despite the volatility in world markets. It added that its outlook for this year is positive.

“We’ve experienced strong demand for our services in the sectors and regions in which we operate. Our backlog of orders has increased approximately 50% this year and our pipeline of work continues to grow in both the short and medium term. We remain positive that Kentz is positioned strongly for continued growth in 2010 and 2011,” said the company’s chief executive, Dr Hugh O’Donnell.

Latest estimates suggest that the last three months of 2009 showed year-on- year growth in oil demand for the first time since the second quarter of 2008, with the long-term view for oil and gas demand positive as many companies begin to move out of recession. This is significant for Kentz as many of its clients are increasing their capital expenditure as a result.

Just last week, the Clonmel company announced that it had won a €48m contract to build the main processing plant for a significant new coal project in Mozambique.

Yesterday’s trading update added that management expects the company’s 2009 figures to be in line with analysts’ full-year revenue and profit expectations, adding that it has “good visibility” on its future contracts.