Kentz revenues top $1bn for first time and profits rise

PROFITS AT engineering specialist Kentz grew 50 per cent to $67.5 million (€48 million) last year with revenues topping $1 billion for the first time.

Kentz, which provides instrumentation and engineering services for the global oil, mining and pharmaceuticals industries, said yesterday that 2010 revenues increased by 50 per cent to $1.06 billion from $704 million the previous year.

Pre-tax profit grew at a similar rate to $67.5 million last year from $44 million in 2009. Pre-tax margins were largely unchanged at 6.4 per cent.

Chief executive Hugh O’Donnell said yesterday that revenues grew particularly strongly during the second half of the year, with the increase especially marked in the final three months.

Mr O’Donnell added that, through its three global service units, the group was getting contracts on larger oil and gas projects.

Breaching the $1 billion revenue mark was significant for the company, he said, and was a key aim when it floated on London’s alternative investment market (Aim) in 2007.

“It is very important for us and it allows us to position ourselves to move to the next level,” he said.

Chief finance officer Ed Power said margins had tended to remain steady over the last few years, although the group was seeing higher returns from joint ventures, which are mainly in the exploration and production industries.

Basic earnings per share were up in line with revenues and profits at 40.66 cent from 26.46 cent. The Kentz board is proposing to pay a final dividend of seven cent, giving a total of 10 cent for 2010, a 67 per cent increase on 2009.

The firm’s backlog – contracted work not yet completed – stood at $1.6 billion at the end of the year, 6.6 per cent ahead of the end of 2009, when it was $1.5 billion. By the end of January, it was $1.63 billion.

The company said that, of its existing backlog, $932 million was due to be completed this year, with a further $600 million in 2012.

It has received letters of intent and orders for close to $70 million worth of new contracts since the end of January.

Mr O’Donnell said that the current spike in oil prices would not necessarily lead to a step-up in exploration and production activity, with a potential spin-off for the group.

He pointed out that when oil fell to the $50-a-barrel mark in the second half of 2008, activity remained the same. He added that a stable price in the $70- to $90-a-barrel range would be preferable from the industry’s point of view.