McDermott (MDR) Boosts Saudi Exposure With New Tank Contract
Zacks Investment Research | Jan 16, 2019 09:29PM ET
McDermott International, Inc. (NYSE:MDR) recently announced that it has received a contract from Daelim Saudi Arabia Company Ltd. Per the deal, the services to be provided by McDermott will be used at Ma'aden Ammonia Plant located in Ras Al-Khair of the Kingdom of Saudi Arabia.
The contract requires McDermott to provide engineering, procurement and fabrication works for four Ammonia Tanks at the site along with nine CB&I storage tanks. The company intends to execute the contract from its facilities located in Saudi Arabia.
The contract work is likely to start promptly and will be incorporated in McDermott’s fourth-quarter 2018 backlog. The company had a backlog of $11.5 billion as of Sep 30. With deals like the latest one, the company’s revenue pipeline is expected to grow even bigger. The contract, which is worth between $1 million and $50 million, further deepens McDermott’s presence in Saudi Arabia.
Notably, the deal from Daelim Saudi Arabia marks its second tank-related contract this month. Last week, the company received a contract from Puma Energy (Australia) Fuels Pty Ltd., a vertically integrated midstream and downstream global oil company. Per the contract, McDermott will support engineering, procurement and construction works for 11 fuel tanks that are located at an import terminal in Kwinana, near Perth, Western Australia. While onsite works are expected to start in the first quarter of 2019, the project is expected to be completed in the third quarter of 2020.
Houston, Texas-based McDermott is a leading global engineering and construction firm that has a diversified product portfolio, specialty manufacturing and service capabilities, along with proprietary technological expertise. Unlike other engineering and construction companies, it is well entrenched in major offshore energy projects and is one of the few global contractors that can provide a complete array of services — from design to construction.
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McDermott has lost 63.7% in the past year compared with 39.9% collective fall of the Zacks Investment Research
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