French oilfield services provider Technip returned to profit during the second quarter 2016, after a loss in the prior-year quarter, despite a 9.2 percent drop in revenues.
Technip on Thursday reported a net income of €123.3 million ($136.9M) for the second quarter 2016, compared to a loss of €306.7 million ($340.4M) in 2Q 2015.
The company’s revenues dropped by 9.2 pct during the quarter totalling €2.8 billion, compared to €3.098 billion in 2Q 2015.
Further, the company’s order intake dropped during the quarter at €1.48 billion from €1.51 billion in the same period last year.
The backlog at the end of second quarter was €13.5 billion, compared with €18.8 billion at the end of the same period in 2015.
Technip said that the company’s cost reduction plan is ahead of schedule with €900 million savings to be delivered by 2016 (previously €700 million) out of the total planned of €1 billion.
‘Harsh downturn has not ended’
Thierry Pilenko, Technip Chairman and CEO, commented: “The recent rise in the oil price coupled with evident deflation across the supply chain in oil and gas gives all market participants more confidence to plan for the long term. We are therefore seeing continued focus from clients seeking to get upstream projects to work – notably fast track projects like tie-backs and brownfield, but also larger, strategic investments.
However, Pilenko added that this should not create undue optimism.
“We continue to expect for some time yet a slow rate of new orders and continued competitive pressure across the industry, notably for offshore developments: the prolonged and harsh downturn has not ended.”
Offshore Energy Today Staff