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McDermott announces 4Q16 and 2016 annual results

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World Pipelines,


McDermott International, Inc. (McDermott) has recently announced its financial and operational results for 4Q16 and 2016 annually for the year ended on 31 December 2016.

4Q16

The company’s 4Q16 earnings in accordance with US generally accepted accounting principles (GAAP) were a net loss of US$0.5 million, or US$0.00 per fully diluted share, compared to a net loss of US$18.7 million, or US$0.08 per fully diluted share, for 4Q15.

The company generated 4Q16 adjusted net income of US$5.6 million, or US$0.02 per adjusted fully diluted share, excluding restructuring charges of US$0.6 million, an impairment loss of US$10.9 million related to a marine asset and the year-end non-cash MTM pension gain of US$5.4 million.

The company reported 4Q16 revenues of US$641.8 million, a decrease of US$25.6 million, compared to revenues of US$667.4 million for 4Q15.

The key projects driving revenue for the 4Q16 were the INPEX Ichthys, Saudi Aramco Long Term Agreement II (LTA II), KJO Hout and ONGC Vashishta projects.

McDermott’s operating income for 4Q16 was US$6.3 million, or an operating margin of 1.0%, compared to US$16.3 million, or an operating margin of 2.4%, for 4Q15. Its adjusted operating income for 4Q16 was US$12.3 million, or an adjusted operating margin of 1.9%, excluding the restructuring charges, impairment loss and MTM pension adjustment mentioned above.

In January of this year, McDermott identified failures in supplier-provided, subsea pipe connector components that had previously been installed on the INPEX Ichthys project. The costs attributable to replacing the failed components is estimated to increase by US$34 million, which will reduce 4Q16 operating income by US$31 million, and net income by US$25 million after taxes.

2016 operating results

Net income attributable to McDermott stockholders for 2016 was US$34.1 million, or US$0.12 per fully diluted share, compared to a net loss of US$18.0 million, or US$0.08 per fully diluted share, for 2015.

2016’s net income was US$89.4 million, or US$0.31 per fully diluted share, excluding restructuring charges of US$11.3 million, impairment charges of $55.0 million, a gain of $5.0 million on the exit from our joint venture with THHE and a gain of US$5.4 million non-cash MTM pension adjustment, compared to adjusted net income of $71.2 million, or $0.25 per adjusted fully diluted share, excluding restructuring charges of US$40.8 million, impairment charges of US$6.8 million, a legal settlement of US$16.7 million and non-cash MTM pension loss of US$26.0 million 2015.

McDermott reported revenues of US$2,636.0 million for 2016, a decrease of US$434.3 million, compared to US$3070.3 million of 2015 revenues. The decrease was primarily due to lower activity on our INPEX Ichthys project and completion of the 2015 campaign of the Brunei Shell pipeline replacement project.

The company’s operating income for 2016 was US$142.3 million, or an operating margin of 5.4%, compared to US$112.7 million, or an operating margin of 3.7%, for 2015. Its adjusted operating income for t 2016 was US$203.1 million, or an adjusted operating margin of 7.7%, excluding the restructuring charges, impairment charges and pension MTM gain mentioned above, compared to US$203.0 million, or an adjusted operating margin of 6.6%, for 2015, excluding the restructuring charges, impairment loss, legal settlement and pension MTM loss mentioned above.

2016 operating income for 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 region.

Cash provided by operating activities in 2016 was US$178.2 million, compared to the US$55.3 million of cash provided in 2015. Overdue payments received from Pemex during 1Q16, as well as steady collections in the Middle East, positively impacted cash provided by operating activities for 2016.

Read the article online at: https://www.worldpipelines.com/business-news/22022017/mcdermott-announces-4q16-and-2016-annual-results/


 

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