McDermott International announced results for the fourth quarter ended December 31, 2015. The company realized Q4 adjusted net income of $16 million, or $0.06 per adjusted fully diluted share.
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This is excluding restructuring charges of $8.7 million and the year-end non-cash mark-to-market pension charge of $26 million, compared to an adjusted net income of $11.2 million, or $0.04 per adjusted fully diluted share, excluding restructuring charges of $6 million and the year-end non-cash mark-to-market pension gain of $2.9 million in the prior-year fourth quarter.
Fourth quarter 2015 earnings per share attributable to McDermott stockholders on a consolidated basis prepared in accordance with U.S. generally accepted accounting principles (GAAP) was a net loss of $18.7 million, or $0.08 per fully diluted share, compared to earnings of $8.2 million, or $0.03 per fully diluted share for the prior-year quarter.
The company reported fourth quarter 2015 revenues of $667.4 million, a decrease of $139 million, compared to revenues of $806.4 million for the prior-year fourth quarter.
The INPEX Ichthys project drove the decrease in revenue as it had comparatively lower activity than the prior-year fourth quarter which included significant marine activities, including the installation of the riser support structure and the reeled pipe lay scope.
The key projects contributing to revenue for the fourth quarter of 2015 were INPEX Ichthys, Aramco Safaniya Phase 2, ADMA 4 Gas Injection, Brunei Shell pipeline replacement and PB Litoral.
The company’s adjusted operating income for the fourth quarter 2015 was $48.2 million, or an adjusted operating margin of 7.2%, excluding the adjustments mentioned above.
These results compare to the 2014 fourth quarter adjusted operating income of $29 million, or an adjusted operating margin of 3.6%, excluding the adjustments mentioned above.
Operating income for the fourth quarter 2015 was positively impacted by the successful negotiation and agreement of weather related recoveries in the Middle East, a change order on the INPEX Ichthys contract, cost reductions as a result of the McDermott Profitability Initiative (MPI), reversal of liquidated damage reserves related to a schedule extension on PB Litoral and better than expected utilization.
These positive impacts were partially offset by idle costs associated with some of our marine vessels and fabrication facilities due to project sequencing and seasonality.
Cash provided by operating activities in the fourth quarter 2015 was $60.6 million, a decrease compared to the $119.3 million provided in the fourth quarter 2014. The fourth quarter 2015 was negatively impacted by Pemex unilaterally extending payment terms to its suppliers, including McDermott.
For the full-year ended December 31, 2015, the company realized adjusted net income of $65.5 million, or $0.23 per adjusted fully diluted share, excluding restructuring charges of $40.8 million, a legal settlement of $16.7 million and the year-end non-cash mark-to-market pension charge of $26 million, compared to an adjusted net loss of $60.8 million, or $0.26 per fully diluted share, excluding restructuring charges of $18.1 million and the year-end non-cash mark-to-market pension gain of $2.9 million in the prior-year.
Consolidated GAAP full-year 2015 results were a net loss of $18 million, or $0.08 per fully diluted share, compared to a net loss of $76 million, or $0.32 per fully diluted share in the prior-year.
The company reported revenues of $3.1 billion for the year ended December 31, 2015, an increase of $0.8 billion, compared to $2.3 billion for the year ended December 31, 2014. The increase was primarily attributable to progress on INPEX Ichthys, Brunei Shell pipeline replacement and PB Litoral.
The company reported full-year adjusted operating income of $174.7 million, or an adjusted operating margin of 5.7%, excluding the adjustments mentioned above.
These results compare to the full-year 2014 adjusted operating income of $23.7 million, or an adjusted operating margin of 1.0%, excluding the adjustments mentioned above and including $46.2 million of gains on asset sales.
Operating income for the full-year was positively impacted by significantly improved project execution, including on the INPEX Ichthys project, where activities remained on schedule, continued progress made on multiple Saudi Aramco projects and installation and hook up of the PB Litoral facilities ahead of schedule.
Cash provided by operating activities in the full-year 2015 was $55.3 million, an increase compared to the $7 million provided in the full-year 2014. ■