French oil services group Technip warned it expects margins to fall to ‘exceptionally low’ levels in early 2014.
The company, which is predicting strong growth for both 2014 and 2015, warned that operating margins could drop to around 5% for the first quarter of next year.
The early impact of multi-year projects, vessel maintenance and the start-up costs of the firm’s manufacturing plant in Brazil were blamed for the predicted fall.
However, the firm – which operates numerous North Sea contracts – said the rest of 2014 was expected to show ‘substantially better’ performance with a 12% margin for the rest of the year, and a 15-17% margin for 2015.
“The strong investments we have made in people, technology, assets and national content over the last few years has enabled Technip to broaden its market footprint, positioning us to provide to our customers better value-added earlier in their project life cycles,” said Technip chief executive Thierry Pilenko.
“As a result, our backlog stands at a record level, is diversified and is profitable. Opportunities for new project awards near- and medium-term continue, as we see it at Technip, to be widespread.
“This enables us to set realistic and achievable objectives for revenue and profit over the coming two years.”
The company said it expected to make revenues of up to £4.8billion next year.
Recommended for you
