Kentz’s work backlog jumps by 52%

KENTZ, the oil and gas industry construction company, said its backlog of work had risen 52% at the end of the third quarter, compared to the second, and predicted continued double-digit earnings per share.

Chief executive Hugh O’Donnell said the company’s clients, mainly big international oil groups such as Exxon Mobil, were continuing to invest in new projects such as liquefied natural gas terminals, despite global economic uncertainty.

Analysts said the $2.4 billion (€1.77bn) backlog, which amounts to around two years of work for the Irish company, left Kentz with one of the clearest earnings streams of any European oil services group.

“We’ll be guiding analysts to consensus for this year and next year and that’s for double-digit EPS growth,” Mr O’Donnell told Reuters in a phone interview.

He added that the rising backlog of work was increasingly made up of reimbursable, or cost-plus contracts, whereby clients bore the risk of cost over-runs. The margins on this work is often lower than on lump sum contracts, but the risk of incurring losses was lower.

Italy’s Saipem, Europe’s biggest oil services company, and French rival Technip last month reported rising third-quarter profits.