Diversity's the key to Kentz's progress

Kentz reported increased levels of activity across its businesses in Africa, Australasia and the Middle East, as the company's newly “differentiated and agile” business model allowed it to respond more effectively to changes in demand across the sector. The strategic focus on diversification helped bump up revenues by nearly a fifth, while operating profits (before exceptional items) were up by a tenth to $115m (£69.7m). The stand-out performance came from Kentz’s Technical Support Services business, where revenues and the order backlog were up by 60 and 83 per cent respectively.

The broadening of Kentz's range of services was accelerated by last year’s $435m deal to acquire Valerus Field Solutions. It’s too early to gauge the full impact of the acquisition, which was only signed off in January, but it should add around $500m to Kentz’s top line this year. More importantly, the integration of Valerus will enable Kentz to significantly expand its footprint in Latin America and the US shale gas market - two of the expected long-term growth themes within global energy markets, particularly in light of the proposed liberalisation of Mexico’s oil and gas industry.

Kentz also reports that the pipeline of new business opportunities is up by just under a fifth to $15.6bn. There has already been a marked increase in its order backlog, which stood at $4.1bn at the end of February – up by a third since the year-end, albeit mainly because of the acquisition. After the year-end the UGL Resources/Kentz joint venture was awarded a $640m contract for engineering work on the Ichthys LNG project in Australia.