Page 43 - ASPRI 2122 v2

DIRECTORY OF SINGAPORE PROCESS & CHEMICALS INDUSTRIES 2021/2022
B efore the low oil prices had the chance to make a sustained recovery, Covid-19 came along in 2020 to further aggravate the difficulties of the oil & gas and chemicals industries. Through focusing mostly
on operational efficiency, asset optimisation and cost management, many of the world’s leading companies have managed to overcome the worst. By being nimble and broadening their earnings base, some have continued to be profitable even in the face of the Coronavirus storm.
Global Engineering Procurement and Construction (EPC) companies have responded to the shift by transforming their operations and finding new revenue streams that can drive future growth, which include supporting oil and chemical giants in their low carbon emission and energy transition efforts.
As the world pivots to a more sustainable and lower carbon future, it is becoming necessary for local process construction and maintenance (PCM) companies, which have suffered a severe hit from a number of cancelled or postponed newbuild projects because of Covid-19, to do likewise, to prime themselves to support their clients through this change.
Heavy lifting in progress
Its Technip Energies division was spun off on February 16, 2021 and listed on the Netherlands Exchange to focus on downstream EPC project execution.
For H1 ended 30 June 2021, Technip Energies reported that its adjusted revenue increased year-on-year by 8% to €3.2 billion. Its adjusted EBIT dropped year-on-year by 20% to €260.5 million, resulting in a net loss of €107.2 million which is 19% lower than the previous corresponding period loss. It said its year-to- date order intake was €7.9 billion, which largely consisted of Energy Transition related work, including LNG, providing it with a substantial improvement in backlog.
Worley Limited reported revenue of US$9.5 billion for the year ended 30 June 2021. This was down 27% from the previous financial year. Underlying profit before amortisation and after income tax expense (NPATA) attributable to shareholders was US$281 million (US$432 million).
Major EPCs take a hit
From the United Kingdom to Australia, most of the global EPCs have seen their revenues shrunk further as the impact of the Covid-19 pandemic snuffed out hopes of early recovery.
John Wood Group PLC (Wood) recorded a net loss of US$228 million for the year ended 31 December 2020 compared to a profit of US$73 million in 2019 on revenue decline of 24% to US$7.6 billion. Growing revenues in renewables and relatively robust revenue in process and chemicals helped to offset the drop in sales from the conventional energy business segment.
For its first half 2021 ended 30 June 2021, Wood reported revenue of US$3.2 billion, down 22.9% “primarily reflecting the impact of Covid-19 and including a US$74 million reduction in revenue from disposed businesses”. Its adjusted EBITDA was US$262 million and operating profit before exceptionals of US$86 million.
It said the company had “good activity levels in built environment, relatively robust renewables activity and improving demand in conventional energy markets, partly offsetting lower activity in process & chemicals, as larger projects reached completion”.
Wood’s order book at June 2021 stood at US$7.7 billion, up 18% compared to December 2020.
For TechnipFMC plc, 2020 was a year like no other with unprecedented global challenges due to the Covid-19 pandemic and the sharp drop in demand for oil and natural gas. Its net loss widened to US$3.2 billion from US$2.4 billion in 2019 on revenue of US$13.1 billion, a 3% drop from US$13.5 billion in 2019.
The company had a backlog of US$14.1 billion at the end of 2020, down by 12% from the previous year. Approximately 60% of its total order backlog was linked to energy transition, including LNG.
37