Babcock & Wilcox's Quarterly Revenues Dip as Renewables Projects Drain

Researched by Industrial Info Resources (Sugar Land, Texas)--Power technology provider Babcock & Wilcox Enterprises Incorporated (NYSE:BW) (Charlotte, North Carolina) posted second-quarter 2018 revenues of $291.3 million, a decrease of $14.9 million from second-quarter 2017, as six renewable energy projects that the company is working on continue to drain profits due to initially underestimated project costs. Babcock & Wilcox has a hand in virtually all industries as it provides equipment services to industrial energy producers. Industrial Info is tracking more than $6.4 billion in projects involving Babcock & Wilcox.

The company is working through a series of six renewable energy projects in Europe for which it had underestimated project costs. Babcock & Wilcox terms these the "Renewable loss projects." The projects include biomass and waste-to-energy plants in Denmark and the United Kingdom. In a press release, Babcock & Wilcox Chief Executive Officer Leslie C. Kass said: "While we acknowledge our Renewable projects have been challenging and we recognized increased estimated costs in the quarter, we are continuing to make progress toward completion of the Renewable loss projects and anticipate having four of the six projects turned over to the customers in the next three months. Every day that we work to get through the remaining Renewable loss projects, we get closer to being able to illustrate to our shareholders the potential earnings power of the business and true value that Babcock & Wilcox delivers to its customers and employees."

Among these projects is a 14.5-megawatt (MW) waste-to-energy plant in Gloucester, England, for which Babcock & Wilcox is providing engineering, procurement and construction. The project will dispose of 190,000 tons per year of municipal solid waste to produce refuse-derived fuel to provide energy to the grid. Construction began in the summer of 2016 and is expected to be completed by the end of this year. The project has an estimated total investment value (TIV) of $231.7 million. For more information, see Industrial Info's project report.

Among the largest projects being tracked by Industrial Info involving Babcock & Wilcox is Royal Dutch Shell plc's (NYSE:RDS-A) chemicals complex in Monaca, Pennsylvania. Babcock & Wilcox is acting as a consultant on the project, which kicked off in early 2017. An ethylene plant will produce 1.5 million metric tons per year and will be accompanied by high-density polyethylene (HDPE) units and a linear low-density polyethylene (LLDPE) unit, as well as a 250-MW cogeneration plant. The plant will use ethane feedstock sourced from the Marcellus Shale. Construction is expected to wrap up in 2020. For more information, see Industrial Info's project reports on the ethylene plant, gas-phased HDPE unit, slurry HDPE unit, LLDPE unit and cogeneration unit.

In Dunkirk, New York, Babcock & Wilcox will provide engineering and construction for a 435-MW coal-to-natural gas conversion at a power plant belonging to NRG Energy Incorporated (NYSE:NRG) (Houston, Texas). The project includes converting three coal-fired Alstom boilers by adding Babcock & Wilcox burners. Construction is set to kick off next summer and be completed by the end of 2019. The project has an estimated TIV of $150 million. For more information, see Industrial Info's project report.

In Hamilton, Ontario, ArcelorMittal SA (NYSE:MT) (Luxembourg, Luxembourg) is underway with the addition of a utilities boiler and turbine generator at its steel works. Babcock & Wilcox is the technology provider for the boiler. The project has an estimated TIV of $112 million and involves replacing three obsolete boilers with a new 450,000-pound-per-hour Babcock & Wilcox steam boiler to generate 20 MW of additional power. Construction began in the fourth quarter of last year and is expected to be completed next summer. For more information, see Industrial Info's project report.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.