LNG engineer Chicago Bridge & Iron (CB&I) reported a net loss of $1.1 billion in the fourth quarter as compared to a net loss of $665.7 million the year before.
On a per-share basis, CB&I posted fourth-quarter net loss of $10.52 per diluted share compared to a net loss of $6.65 per diluted share, in the year-ago period.
CB&I said in its report on Tuesday that the fourth-quarter loss includes four unfavorable non-operating items that total $11.02 per share or $1.17 billion.
For the fourth quarter, revenue was $1.7 billion, compared to revenue of $2 billion for the same period of 2016.
For the full year 2017, revenue was $6.7 billion, compared to revenue of $8.6 billion in 2016. The company reported a net loss of $1.5 billion, or $14.44 per diluted share, as compared to a net loss of $313.2 million or $3.02 per share for 2016.
LNG project charges
Results for the fourth quarter also included pre-tax charges of $101 million on four projects in the company’s engineering and construction operating group.
The project charges include two US LNG export projects the company is working on, namely the Cameron LNG project and the Freeport LNG project.
Project charges for the Sempra-led Cameron LNG amount to $39 million, resulting in part from the recognition of incremental costs resulting from Hurricane Harvey, which the company agreed to absorb in connection with the December 2017 settlement agreement with the project sponsor, CB&I said.
“The settlement considerably de-risks the project for CB&I, as it resolves all past commercial issues, provides significant cost coverage for certain past and current cost increases, includes an incentive bonus payment related to expedited project completion and, importantly, resets the trigger dates for any potential liquidated damages,” the company said.
As per the Freeport LNG project, CB&I took charges of $20 million due in part to the adjustment of contingency provisions in the existing contract.
The company said it was continuing to evaluate and estimate the indirect impacts of Hurricane Harvey, including potential impacts to productivity and schedule-related prolongation costs on the project.
CB&I added it believes any costs incurred as a result of the hurricane are recoverable under contractual force majeure provisions.
FIDs to be made
Looking forward, CB&I and its joint venture partners “continue to be well positioned” in the U.S. Gulf Coast and East African regions to capitalize on the strengthening LNG market, the company said.
CB&I said it was confident that final investment decisions (FIDs) for projects will be made in 2018 because of continued robust growth in global gas demand, more serious offtake discussions between its clients and potential LNG buyers, and the company’s continued active support of developing these projects with its clients.
To remind, CB&I and McDermott International are moving closer in becoming one company. The duo agreed in December last year to combine in an all-stock transaction to create “a premier fully vertically integrated onshore-offshore company” with an enterprise value of about $6 billion.
LNG World News Staff