Foster Wheeler's 'excellent' quarter

Zug, Switzerland - Foster Wheeler AG has reported second-quarter 2009 consolidated earnigns (EBITDA) of $163.7 million, compared with $202.2 million in the same period last year. Despite the decline, chairman and CEO Raymond Milchovich, said the company had delivered an "outstanding commercial and operational performance" in both its business groups.

"A strong performance of our Global Engineering and Construction (E&C) group was bolstered by its ability to capture available profit enhancement opportunities during the quarter," said Milchovich. "Also, our Global Power Group’s performance benefited from the actions it has taken over the past several years in the pursuit of commercial and operational excellence.”

At the E&C group, EBITDA in the second quarter of 2009 was $145 million, excluding the impact of approximately $14 million of unfavorable currency effects. Despite the lack of any new “mega” contract booked during the period, new orders booked in FW scope remained at a very strong level.

New orders contributed to an all-time record level of 'scope backlog' of $1.98 billion in the second quarter of 2009, excluding the impact of approximately $218 million of unfavorable currency translation. Man-hours in backlog at the end of the second quarter amounted to 15.2 million, the second-highest in the company’s history.

“The competitive pressure in our E&C Group is somewhat more pronounced than it was at this time last year. However, as we have consistently reported, we have an extensive prospect list that offers numerous examples of clients who are planning to proceed with projects," said Milchovich.

"After posting a record level of currency-adjusted scope backlog in E&C – and with a near-record 15.2 million man-hours in backlog – we believe we are demonstrating our ability to win targeted projects in a competitive environment, the FW leader added.

At FW's Global Power Group, scope new orders and operating revenues were below the average quarter of 2008 due to continued weakness in global demand for solid fuel boilers.

Milchovich commented: "Demand for solid fuel boilers has been very weak. Nevertheless, we believe several clients are likely to make award decisions in the second half of 2009 and, given our global leadership position in circulating fluidized-bed boilers, we expect a very high win rate, assuming the projects go forward.

 "As an example, last week we received an award for a 55-megawatt CFB in Poland. Even with such wins, we anticipate that business conditions will remain challenging for our power business.”