Fluor continues to go backwards to go forwards

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Fluor’s Urban Solutions arm built one of the world’s largest iron ore processing facilities for BHP at its $3.6 billion South Flank project in Australia.
US engineering company ended 2021 ‘on a positive note’

US-based engineering and construction company Fluor Corporation had a relatively stable fourth quarter, all things considered, having resembled the Incredible Shrinking Corporation over the past few years.

The New York-listed company still booked a net loss of US$144 million for 2021 ($294m in 2020) and lost a further chunk of its contract backlog, which stood at $25.6 billion only a year or so ago. It finished 2021 at $18.9b.

Fourth-quarter revenue came in at $3157m compared with $3268m in the same period in 2020. Full-year revenue of $12.4b was down on the $14.16b recorded for 2020 (it reported $15.67b for that year last February). Fluor’s total revenue for FY18 was $18.85 billion.

Since January 2018 its stock price has dropped by about two-thirds and its current market value is about $3 billion. So far this year the share price is down nearly 16%.

Fluor was awarded new work worth $8.8b in 2021, which compared with $7.5b in 2020.

Corporate general and administrative (G&A) costs for 2021 were $216 million, up from $202 million the previous year, “due to the impact of performance and stock price-driven incentive compensation”.

CEO David Constable said: “Over the last 12 months the company has made tremendous progress on executing our strategy to build a better future. With a strengthened capital structure and a renewed focus on the key markets we serve, we ended 2021 on a positive note and are starting 2022 by building on this encouraging momentum.”

Fluor’s Urban Solutions business, containing the former mining and industrial division, returned a profit of $38m in 2021 ($161m in 2020) with revenue falling to $4.4b from $5.9b in 2020 “due to the closeout of data centre projects in Europe and mining projects in South America and Australia”.

“Full year new awards in 2021 were $2.7b, down from $3.6b a year ago. Ending backlog was $7b compared to $9.2b a year ago,” the company said.

Mining/industrial work made up 16% of Fluor’s order backlog at the end of 2020.

In its mining and metals market commentary this month the company said it anticipated “awards ramping up in the second half of the year”.

 

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