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Released August 11, 2016 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Energy services provider Babcock & Wilcox Enterprises Incorporated (NYSE:BW) (B&W) (Charlotte, North Carolina) is running, but has not yet been able to hide, from coal-fired power generation, as evidenced in the company's second-quarter 2016 results. B&W is putting a renewed emphasis on waste-to-energy and other renewable projects, starting with those under construction in the United Kingdom. Industrial Info's project database is tracking $2.77 billion in active projects involving B&W.
The company reported a net loss of $63.5 million in second-quarter 2016, compared with $4.1 million in net earnings for the same period last year. Other factors weighed on the company's earnings, such as Canadian projects that were delayed by this summer's disastrous fires in Alberta and the $32 million loss of a European renewable energy contract. But it was restructuring charges related to coal-fired projects that hit the bottom line the hardest; the backlog in Global Services fell to $1 billion from $1.16 billion from the same period in 2015, driven by continuing pressure on the U.S. coal aftermarket business.
"We booked $32 million in charges, primarily associated with the proactive restructuring of our traditional coal business, in light of a larger than expected shift in the U.S. electricity market," said Jim Ferland, the chairman and chief executive officer of B&W, in a quarterly conference call. "The facility consolidation efforts associated with the coal market shift required a mid-year revaluation of our pension liability, resulting in a $30 million non-cash mark-to-market pension adjustment."
In fact, the company's largest project is a coal-fired plant. B&W's Chinese subsidiary, Babcock & Wilcox Beijing Company Limited (Beijing, China), is entering its third year of construction on Shanxi Shentou Power Generation Company Limited's (Shuozhou, China) $1.2 billion addition of units 3 and 4 at Shuozhou Shentou No.1 Power Plant in Shuozhou, China. The subsidiary is performing design-build services for the coal-fired facility, which is designed to have a capacity of 2,000 megawatts (MW) and to be completed in mid-2018. For more information, including details on major components and environmental requirements, see Industrial Info's project report.
In its ongoing effort to diversify its energy-project portfolio, B&W plans to separate its renewables-related projects into a new segment.
"The new standalone renewables segment will consist of all of our renewable waste energy and biomass power activities, including our B&W Vølund subsidiary and O&M contracts for waste to energy facilities in the U.S. and Europe," said Jenny Apker, the senior vice president and chief financial officer, in the earnings call. "The renewables segment's 2016 revenues are expected to be approximately $400 million."
In the United Kingdom, Babcock & Wilcox Vølund A/S, a Danish-based subsidiary, is at work on five closely watched waste-to-energy projects: Viridor Waste Management Limited's (Taunton, England) $261.3 million Oxwellmains Waste-to-Energy CHP Plant in Dunbar, Scotland; Glennmont Partners' $209 million Biomass CHP Plant in Port Clarence, England; Glennmont Partners' $209 million Margam Biomass Power Plant in Port Talbot, Wales; Copenhagen Infrastructure Partners' $196 million Templeborough Biomass Power Plant in Rotherham, England; and ACS Group's $82.31 million Javelin Park Waste-to-Energy Plant in Gloucester, England. Each of these projects is under construction, and all except the Dunbar project kicked off more or less according to schedule.
Valmet Oyj recently signed an agreement with the Vølund subsidiary to supply automation technology for the Dunbar project, construction of which had been held up for about two years before it kicked off in April 2015. It is set to be completed late next year. The Port Clarence project faced a wave of protests earlier this week from activists opposed to recently passed engineering regulations, according to local newspaper The Northern Echo, but the demonstrations are unlikely to affect progress at the plant. For more information, see Industrial Info's project reports on the Dunbar, Port Clarence, Port Talbot, Rotherham and Gloucester projects.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 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/.
The company reported a net loss of $63.5 million in second-quarter 2016, compared with $4.1 million in net earnings for the same period last year. Other factors weighed on the company's earnings, such as Canadian projects that were delayed by this summer's disastrous fires in Alberta and the $32 million loss of a European renewable energy contract. But it was restructuring charges related to coal-fired projects that hit the bottom line the hardest; the backlog in Global Services fell to $1 billion from $1.16 billion from the same period in 2015, driven by continuing pressure on the U.S. coal aftermarket business.
"We booked $32 million in charges, primarily associated with the proactive restructuring of our traditional coal business, in light of a larger than expected shift in the U.S. electricity market," said Jim Ferland, the chairman and chief executive officer of B&W, in a quarterly conference call. "The facility consolidation efforts associated with the coal market shift required a mid-year revaluation of our pension liability, resulting in a $30 million non-cash mark-to-market pension adjustment."
In fact, the company's largest project is a coal-fired plant. B&W's Chinese subsidiary, Babcock & Wilcox Beijing Company Limited (Beijing, China), is entering its third year of construction on Shanxi Shentou Power Generation Company Limited's (Shuozhou, China) $1.2 billion addition of units 3 and 4 at Shuozhou Shentou No.1 Power Plant in Shuozhou, China. The subsidiary is performing design-build services for the coal-fired facility, which is designed to have a capacity of 2,000 megawatts (MW) and to be completed in mid-2018. For more information, including details on major components and environmental requirements, see Industrial Info's project report.
In its ongoing effort to diversify its energy-project portfolio, B&W plans to separate its renewables-related projects into a new segment.
"The new standalone renewables segment will consist of all of our renewable waste energy and biomass power activities, including our B&W Vølund subsidiary and O&M contracts for waste to energy facilities in the U.S. and Europe," said Jenny Apker, the senior vice president and chief financial officer, in the earnings call. "The renewables segment's 2016 revenues are expected to be approximately $400 million."
In the United Kingdom, Babcock & Wilcox Vølund A/S, a Danish-based subsidiary, is at work on five closely watched waste-to-energy projects: Viridor Waste Management Limited's (Taunton, England) $261.3 million Oxwellmains Waste-to-Energy CHP Plant in Dunbar, Scotland; Glennmont Partners' $209 million Biomass CHP Plant in Port Clarence, England; Glennmont Partners' $209 million Margam Biomass Power Plant in Port Talbot, Wales; Copenhagen Infrastructure Partners' $196 million Templeborough Biomass Power Plant in Rotherham, England; and ACS Group's $82.31 million Javelin Park Waste-to-Energy Plant in Gloucester, England. Each of these projects is under construction, and all except the Dunbar project kicked off more or less according to schedule.
Valmet Oyj recently signed an agreement with the Vølund subsidiary to supply automation technology for the Dunbar project, construction of which had been held up for about two years before it kicked off in April 2015. It is set to be completed late next year. The Port Clarence project faced a wave of protests earlier this week from activists opposed to recently passed engineering regulations, according to local newspaper The Northern Echo, but the demonstrations are unlikely to affect progress at the plant. For more information, see Industrial Info's project reports on the Dunbar, Port Clarence, Port Talbot, Rotherham and Gloucester projects.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 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/.
