Houston-based LNG engineer KBR reported a fourth-quarter net loss of US$87 million compared to net income of $42 million in the corresponding quarter a year before.
According to the company’s report, consolidated revenue in the fourth quarter of 2016 was $1.2 billion compared to $1.1 billion in the fourth quarter of 2015.
An acquisition in the government services segment and organic growth from contracts with the U.S. Military boosted the company’s revenue.
The net loss, however, was driven primarily by a reduction in gross profit from a $94 million increase in the forecast costs to complete a downstream EPC project, a reduction in the percentage of completion estimated on an LNG project joint venture in Australia which impacted the timing of profit recognition, and restructuring charges, the company said.
Its engineering and construction segment recorded a revenue of $530 million, a decrease of $166 million from the same period in the prior year, mainly due to reduced activity on several projects and the near-completion of one of the major LNG projects in Australia.
However, looking forward, KBR’s E&C business remains well placed to take advantage of the next cycle of modular and mid-scale LNG opportunities in North America and elsewhere, to grow the Industrial Services business globally.
Speaking of expectations for 2017, Stuart Bradie, KBR’s president and CEO said the company expects “that over 70 percent of KBR’s revenue will come from work executed under services and reimbursable-type contracts.”
The company expects 2017 revenues to be comparable to 2016 as the increase in activities within the government services segment should offset E&C market challenges.