McDermott reports its latest results

The company recorded revenues of US$2.1 billion, a net loss of US$1.9 billion, or US$10.37 per diluted share, and an operating loss of US$1.7 billion for 3Q19. The net loss was due primarily to non-cash accounting charges of US$1.5 billion related to impairments of goodwill and intangible assets and US$256 million of changes in project gross profit on specified projects identified in a covenant of the company’s new Superpriority Credit Agreement.

Operationally, four of McDermott’s five operating segments reported solid performance during 3Q19, led by the Middle East and North Africa (MENA), which reported operating income of US$69 million and an operating margin of 13.3%, both sharply improved from 2Q19. Additionally, the company reported backlog of US$20.1 billion, new awards of US$1.7 billion and a revenue opportunity pipeline of a near-record US$89.1 billion for 3Q19.

David Dickson, President and Chief Executive Officer of McDermott, said: “We experienced continued strong backlog, with several significant customer project awards, including the Ichthys Phase 2a Gas Field Development Project in Australia, which we developed in conjunction with our integrated subsea-solutions partner, Baker Hughes, as well as a large LNG tank project on the US Gulf Coast. We also achieved solid operating results in our MENA, Asia Pacific (APAC), Europe, Africa, Russia and Caspian (EARC) and Technology segments. At the same time, our capital structure continues to be pressured by certain legacy CB&I projects. Our recently announced US$1.7 billion financing agreement with our lenders signals their confidence in our underlying business. We continue working with them to achieve a long-term balance sheet solution as we remain focused on delivering value for our customers, employees, subcontractors, and suppliers.”

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