In its full year 2011 reporting Aegion has revealed its scope of work on the giant Wasit offshore gas field development project in Saudi Arabia has been slashed $18 million, reducing the order value from $48 million down to $30 million. Aegion had the contract value booked through CRTS, a company it bought in 2011.
“A few weeks ago, we received a notice cancelling approximating $18 million of the Saudi Arabia WASIT offshore gas field project,” said J. Joseph Burgess, President and Chief Executive Officer of Aegion.
“The cancellation involved the removal of certain small-diameter joint coatings from the scope of work as a cost savings measure, reducing the total contract to $30 million from $48 million. Although we are disappointed with this decision, the WASIT project remains a landmark project for CRTS supporting a solid backlog of projects for the Energy and Mining platform in 2012. We believe the successful execution of the WASIT project will drive new opportunities for CRTS’s proprietary robotics coating technology.”
Burgess said CRTS made a modest contribution to operating profit in 2011. “But we anticipate a significant increase in profits in 2012.”
Aegion reported full year 2011 net income, excluding acquisition-related transaction expenses, restructuring charges and expenses related to redemption of prior debt, of $36.9 million.
Consolidated contract backlog at December 31, 2011 reached $464.2 million, a 13.6 percent increase from December 31, 2010. Energy and Mining contract backlog increased 75.5 percent to $256.4 million because of growth at UPS, CRTS and offshore projects.
