KBR posts huge loss due to restructuring costs
US-based contractor posts $1.24bn Q4 loss on revenues of $1.4bn
Construction giant KBR announced a loss of $1.24bn for the fourth quarter of 2014 following its announcement in December that it was cutting a number of business lines as part of a strategic review.
The US-based company revealed in December that it plans to exit a number of business lines, including fixed-price power, fixed-price infrastructure and US minerals, its building group and a fixed-price, standalone construction business.
As a result, it has racked up its huge, Q4 loss compared to a net loss of $56m a year earlier. Fourth quarter revenues slipped from $1.7bn to $1.4bn. Full-year revenues fell by 12% to $6.4bn, and it moved from a net profit figure of $75m in 2013 to a $1.26bn loss for 2014.
The company has said that it plans to focus its efforts on core strengths in hydrocarbons and government services. It will operate three core divisions - technology & consulting, engineering & construction and government services.
Its engineering & construction arm remains its biggest revenue stream by some distance and will focus on oil & gas, petrochemicals and industrial projects.
President & CEO Stuart Bradie said the results "reflect the significant charges associated with the company’s restructuring".
He added that recent project wins, including a long-term offshore oil & gas agreement with Saudi Aramco, reflected its strategy, which the company has said will lead to annual cost savings of $200m a year.
"The transformation of KBR has begun and is proceeding according to plan," said Bradie.
"While oil prices remain depressed, KBR’s technology and project delivery capability for natural gas derivative products and associated downstream facilities positions us well for project awards during 2015."