Kentz reports 50% rise in first-half profits

CLONMEL engineering firm Kentz posted a 50% rise in first-half pre-tax profit, driven by its construction and technical support services units, and said it expected to exceed its previous targets for the full year.

Kentz, whose clients include Chevron, Royal Dutch, Shell, BP and Exxon Mobil, also raised its interim dividend by 67% to 5 cents per share.

Analysts expect the company to post a full-year pre-tax profit of $73.1 million (€50.6m) on revenue of $1.14 billion, according to Reuters.

The company was bullish about the rest of the year in its result statement: “Following our strong trading position during the first half of 2011 and our continued positive trading since the end of June we expect to materially exceed our earlier targets for the full year.”

Commenting on the results, Kentz chief executive Hugh O’Donnell said the company continued its strong performance in the first half of 2011, delivering a number of key developments for the group.

“These included expanding our asset enhancement service offering to clients, completing the acquisition of engineering and project management company RNE, and exceptional delivery in our mining and metals business,” he said.

Mr O’Donnell said the backlog continues to strengthen and said it was particularly pleasing to report a substantial growth in visibility of orders on hand following the award of the significant Gorgon MEI contract in July.

“Kentz is well-positioned through its unique spread of service offerings to align with the needs of core clients as well as capitalise on new opportunities with leading oil and gas and resource customers across their global operations,” he said

Last month, Kentz won a contract worth $2.3bn along with its joint-venture partner Chicago Bridge and Iron Company to develop the Gorgon gas project in Australia.

The company’s January to June pre-tax profit was $37.7m, up from the year-earlier period of $25.2m.

Revenue at the company rose by 48% to $643.5m.

At the end of July Kentz’s order backlog stood at $2.39bn.

Kentz shares, which have risen about 30% so far this year, closed at 417 pence on Friday on the London Stock Exchange, valuing the business at $485.3m.

Following the bank holiday weekend in Britain, the shares opened at 417 pence yesterday on the London Stock Exchange, continuing to value the business at £485.3m.