KBR's Energy Solutions Unit Wins Consultancy Services Work
Zacks Investment Research | Mar 16, 2020 09:46PM ET
KBR, Inc. (NYSE:KBR) has won a Heating Systems Energy Efficiency Study work from the National Environment Agency (“NEA”) of Singapore to provide consultancy services on energy efficiency.
Per the contract, KBR, via its Energy Solutions unit, will help energy intensive industrial facilities to study the energy performance of heating systems. Also, it will develop a best practice guide for the oil refining, petrochemical and chemical sub-sectors. Notably, the project will be primarily executed from its consulting hub, located in Singapore.
Energy Solutions’ Prospects Look Good
The company’s recurring revenue services business — contributing nearly 24% to 2019 revenues — is experiencing solid top-line growth. The company’s consulting business is also experiencing increased activity since the past few quarters on the back of more efficient reutilization and strong pricing environment.
Recently, the company got certified as an Energy Service Company or ESCO in Singapore to serve industrial facilities with energy optimization services. This will enhance KBR’s strengths in feasibility studies and detailed engineering designs.
In 2019, Energy Solutions segment’s revenues increased 16% courtesy of the ramp up of cost-reimbursable projects that include a brownfield revamp refinery project in the U.S. Gulf Coast, a crude terminal expansion project in the Permian Basin and a Greenfield methanol project in Louisiana.
For 2020, the company expects healthy balance between energy and government projects. However, the recent coronavirus outbreak has put pressure on overall economy. The company anticipates lower LNG activity due to Covid-19 woes.
Shares of the company have also witnessed a downfall in the year to date period. The stock has plunged 53.8% so far this year compared with the Zacks Investment Research
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