Kentz profits grow almost 10% to €33m

PROFITS AT engineering and construction group Kentz grew almost 10 per cent last year to €33 million, the company said yesterday.

Tipperary-based Kentz specialises in providing engineering and instrumentation consultation and services to the oil, mining and chemical industries.

It is listed on London’s Alternative Investment Market (AIM).

The company said yesterday that profits before tax were up 9.2 per cent in 2009 to $44.5 million (€32.9 million) from $40.7 million the previous year.

Basic earnings per share increased 5.5 per cent to 26.49 US cents. The company is proposing to pay shareholders a final dividend of four cents per share.

Kentz has already paid a dividend of two cents a share, bringing total dividends for the year to six cents. It intends paying the final dividend in June.

Net cash was $168.3 million at the end of the year, up more than 10 per cent from the previous year’s balance of $152.5 million.

The company’s backlog – that is the value of future contracts that it has won – stood at $1.57 billion at the end of January. Around $700 million of this will be completed during 2010.

The company announced details of the key projects that made up this backlog over the last 12 months.

They include specialist engineering and construction work on the Gorgon and Pluto liquiefied natural gas (LNG) developments in Australia, which is worth almost $360 million, and an oil processing facility in Yemen worth $146 million. Chief executive Hugh O’Donnell said it has a potential pipeline of $2.95 billion, and added that decisions on the awarding of these contracts would be made in the next couple of months.

Mr O'Donnell told The Irish Timesyesterday that activity in the oil exploration and production businesses was beginning to step up as international oil companies continue their search for reserves.

The company’s statement yesterday pointed out that oil prices remained reasonably stable – between $70 and $80 a barrel – after a period of volatility that stretched back into 2008.

Stable prices provided international oil companies with the catalyst they needed to go ahead with projects that they had put on ice after prices began a rapid fall in 2008.

According to Mr O’Donnell, Kentz last year grew its presence in Australia, Papua New Guinea, Sakhalin Island (on Russia’s Pacific coast) and Alaska.

This year it hopes to expand its foothold in Iraq, where oil exploration and production are expected to pick up rapidly this year.

Kentz has a lot of experience in Iraq, but pulled out of the country during the invasion and subsequent conflict earlier in the decade.

“We have been following clients back in there over the last six months of 2009,” Mr O’Donnell.

“If Iraq kicks off it will have the single biggest concentration of oil companies in one country. We see enormous growth potential there.”