McDermott Swings To Loss In Q2

US-based McDermott swung to a loss in the second quarter, despite growth in its revenues and order backlog, according to a July 30 company report. 

The engineering group booked a loss of $146mn for April to June, reversing a $46mn profit it achieved in the same period last year. It also suffered an operating loss of $61mn, compared with a $49mn operating income a year earlier.

However, excluding a non-cash loss of $101mn relating to McDermott’s sale of its Alloy Piping Products (APP) business, as well as the $31mn it booked under restructuring, integration and transaction costs, net loss narrowed to $14mn and the firm also posted an adjusted operating profit of $71mn.

Revenues were also up in the three-month period at $2.137bn, versus $1.735bn a year earlier.

“Although the company reported mixed results for the second quarter of 2019, we are encouraged by the record-setting level of backlog and new awards,” CEO David Dickson said.

McDermott picked up $7.3bn in new awards in the second quarter, while its backlog reached $20.5bn at the end of June, up from $15.4bn three months earlier. In July, the firm also picked up front-end engineering design (Feed) contracts in Argentina and Oman. Dickson said the group was also encouraged by the $7.4bn of revenues it expects to generate next year.

Even so, the company warned it had updated its full-year guidance to factor in “weaker than expected operating results in the second quarter of 2019; the impact of reduced revenues and higher unallocated operating expenses due to slippage in certain new awards and customer changes to schedule on several projects."