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McDermott secures $34.1m net profit in 2016

Revenues earned in 2016 totalled $2.63bn, a decrease of $434.3m, compared to $3.07bn in the previous year

The KJO Hout jacket and topside will be installed and pre-commissioned in the first quarter of 2017.
The KJO Hout jacket and topside will be installed and pre-commissioned in the first quarter of 2017.

Engineering and construction firm, McDermott, reported a net income for the full-year of 2016 of $34.1m, compared to a net loss of $18m in 2015.

Revenues earned in 2016 totalled $2.63bn, a decrease of $434.3m, compared to $3.07bn in the previous year, a company statement said.

McDermott also reported fourth quarter 2016 revenues of $641.8m, a decrease of $25.6m, compared to revenues of $667m for the prior-year fourth quarter.

The key projects driving revenue for the fourth quarter of 2016, according to the company, were the INPEX Ichthys in Australia, Saudi Aramco Long Term Agreement II (LTA II), Al-Khafji Joint Operations (KJO) Hout, Saudi Arabia, and ONGC Vashishta in India projects.

The decrease from the prior-year fourth quarter earnings were primarily due to Pemex PB Litoral project and the additional costs on the INPEX Ichthys project caused by the failed subsea-pipe connector components, partially offset by increased activity on the Saudi Aramco LTA II Lump Sum projects.

McDermott said its operating income for 2016 stood at $142.3m, or an operating margin of 5.4%, compared to $112.7m, for 2015.

Operating income for the full-year of 2016 was primarily driven by marine activity on the INPEX Ichthys, Saudi Aramco’s LTA II, Marjan power system replacement, and 12 Jackets projects, as well as a pipeline repair project in the Middle East.

David Dickson, president and CEO of McDermott, said: “2016 has proven to be a pivotal year for McDermott, as we turned the corner from stabilising and optimising the business to focusing on growth and building a sustainable, profitable business for the future.

“Our strategic initiatives such as One McDermott Way and Taking the Lead have made great strides this year, as seen through a Middle East customer approving work share with fabrication in our Batam fabrication yard and our Middle East area reaching an impressive 48 million man-hours lost time incident (LTI) free.”

The company also noted that fabrication activity in the fourth quarter, in the Middle East, was driven by Saudi Aramco projects and the KJO Hout jacket and deck structures.

Marine operations continued in both Saudi Arabia and Qatar. Execution of the Saudi Aramco Lump Sum LTA II project, awarded in 2015, is progressing according to schedule, and is in the fabrication phase, with work being shared between the Jebel Ali and Dammam fabrication facilities, it said.

The KJO Hout jacket and topside will be installed and pre-commissioned in the first quarter of 2017; the project is more than 55% complete and is expected to be fully complete in the second quarter of 2017.

The three jobs awarded in the second quarter are in the preliminary stages of fabrication, with activity expected during 2017, the statement said.

“Fabrication and installation of the Bul Hanine jackets is complete, with minor closeout work remaining.

“In Qatar, we focused on offshore work for the RasGas Flow Assurance and Looping project, which remains on schedule,” the report said.  

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Construction Week - Issue 749
Sep 15, 2019