Paris-based LNG engineer Technip posted a 4.2 percent lower revenue in the first quarter due to the oil and gas industry downturn.
Technip’s adjusted revenue for the first quarter was 2.76 billion euros ($3.13 billion), as compared to 2.88 billion euros in the quarter a year before, the company said in a statement on Thursday.
“At the start of the year, Technip set out to execute our projects, sustain our balance sheet strength, reduce our costs and progress our strategy – all in response to the harsh and prolonged downturn in our industry,” Thierry Pilenko, Chairman and CEO of Technip said.
“On revenues down 4.2%, we improved our profitability – the Group’s OIFRA margin was 8.6% compared to 6.0% in 1Q 2015. In Subsea, our manufacturing plants were busy and so were our vessels on West African offshore campaigns in particular driving a record 82% vessel utilization rate for a first quarter.”
During first quarter, Technip’s order intake was 930 million euros, down from 1.5 billion euros in the previous year.
“Order intake remained at a low level, but its quality and diversity was satisfactory, spread across both Subsea and Onshore/Offshore projects and our technology, equipment and consulting activities. We ended the quarter with 15 billion euros of backlog and our 2016 guidance well underpinned – and unchanged from the targets we set out in mid-February,” Pilenko said.
“Our views on the market outlook are unchanged compared to mid-February. With a low and volatile oil price and their cashflows under pressure, our clients are more than ever focused on cutting their capex and costs to substantially below 2014 levels. Project awards are therefore being postponed and even cancelled, putting visible strain on some parts of our industry,” the CEO said.
“Overall, we are seeing continued interest worldwide in investing, revamping and upgrading Downstream, but Upstream – even if we may see momentum on a few strategic developments – will be less resilient with front-end work only gaining momentum from late 2016 into 2017,” he added.