Foster Wheeler's 1Q09 Profit Plunges 47%

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Researched by Industrial Info Resources (Sugar Land, Texas)--Construction and engineering firm Foster Wheeler AG (NASDAQ:FWLT) (Clinton, New Jersey) has announced a first-quarter 2009 profit of $72.9 million, down 47% compared with $138.1 million in the same period last year. Chairman and CEO Raymond Milchovich said the decline is attributable to lower earnings before interest, taxes, depreciation and amortization (EBITDA) in both of its business groups: Global Engineering and Construction (E&C) and Global Power. "The Global E&C Group executed lower volumes of work and experienced unfavorable timing and mix of contracts, and volume-related under-absorption of costs relative to the average quarter of 2008," he said in a statement. "Our Global Power Group experienced lower volumes of work executed." Also, the effective tax rate was higher than the average quarter of 2008, he said.

Global E&C

• Backlog - in future revenues: $4.1 billion, down from $7.2 billion year over year
• New orders booked - in future revenues: $809.5 million, up from $707.3 million
• Operating revenues: $952.4 million, down from $1.4 billion
• EBITDA: $81.3 million, down from $134.5 million

Global Power Group

• Backlog - in future revenues: $813.8 million, down from $1.8 billion
• New orders booked - in future revenues: $96.5 million, down from $536.4 million
• Operating revenues: $312.1 million, down from $404.7 million
• EBITDA: $48.8 million, down from $64.4 million

Securing the Paradip refinery project helped to boost the value of new orders booked to $713 million for the Global E&C Group. "In the first quarter of 2009, we booked the largest single contract in terms of man-hours in the company's history -- for engineering, procurement and construction management of a new oil refinery in India," Milchovich said. "While that contract will be an important contributor to income in future periods, the project was just gearing up at the end of the first quarter and thus did not contribute materially to the company's performance in the period."

As part of the International Industrial Database, Industrial Info is tracking 17 projects worth $3.5 billion involving Foster Wheeler at the Paradip refinery. The database includes information on nearly 190 active Foster Wheeler projects worth $64.66 billion, including the Paradip projects.

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