Last quarter, we decided that offshore player
Acergy SA (Nasdaq: ACGY) was
sitting pretty. After reviewing the latest results, I'm
half-pleased to report that not much has changed in the past
three months.
Why only half-pleased? Acergy's business remains subdued
as long as major deepwater oil & gas installations keep
getting delayed. The status quo isn't exactly ideal, but
there are countless companies in worse shape than this
well-capitalized offshore engineering outfit.
For the quarter, revenue was $558 million and adjusted
EBITDA from continuing operations came in at $110 million.
Those figures compare to $526 million and $113 million in the
prior quarter. Clearly margins slipped a bit this time
around, but they appear to have beaten Acergy's expectations.
The firm raised its margin guidance for the year, pointing to
better-than-envisioned vessel utilization, among other
reasons.
In addition to the fair-sized contract win with
Petrobras (NYSE: PBR) that we mentioned last
time, the quarter also saw Acergy snag a decent $110 million
conventional gig with
Total SA (NYSE: TOT) and
BP (NYSE: BP) in Angola. More recently, the
firm also picked up a $170 million award from
Apache (NYSE: APA) in Australia. These sorts
of awards help Acergy to tread water until bigger awards pour
in.
Acergy remains a waiting game in more ways than one. The
company keeps stacking cash on its balance sheet, with the
total now exceeding $800 million. This has certain analysts
and investors increasingly agitated. I don't entirely
disagree with the fellow from Carnegie who delivered this
blunt message to management on the conference call: "If you
exit 2009 with the same cash position, that's going to be a
horrible decision in terms of capital allocation."
Acergy certainly could have been more opportunistic over
the past twelve months. It's really a shame that some
suboptimal governancegot in the way of an aggressive
share repurchase program.
This article was originally published as
Acergy Causes Some Agitationon
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