Foster Wheeler Gets Polish Order – Analyst Blog

Foster Wheeler AG (FWLT) has won a contract to build and erect a circulating fluidized-bed boiler in Poland. The contract was awarded by Polimex-Mostostal S.A. of Poland.

 

Although the terms and conditions of the contract were not disclosed, its value will reflect in the company’s order book for the second quarter of 2010. Commercial operation is scheduled for 2013.

 

The scope of work includes engineering design of the steam generator and auxiliary equipment, construction and commissioning of the same at the site.

 

The company’s Global Power Group designs, manufactures and installs steam generating and auxiliary equipment for electric power generating stations and industrial facilities worldwide. Steam generating equipment includes a full range of technologies, offering independent power producers, utility and industrial clients high-value technology solutions for economically converting a wide range of fuels, including coal, lignite, petroleum coke, oil, gas, biomass and municipal solid waste, into high quality steam and power.

 

FWLT’s circulating fluidized-bed steam generator technology, which is referred to as CFB, is ideally suited to burning a very wide range of fuels, including low-quality and “waste-type” fuels, and it is generally recognized as one of the cleanest solid-fuel technologies available on a commercial basis in the world.

 

We believe that the world demand for energy will continue to grow over the long term and customers will continue to invest in new and upgraded capacities to meet that demand. FWLT has been successful in booking contracts for front-end engineering work, which frequently precedes significant work for engineering, procurement and construction.

 

FWLT continues to be successful in booking contracts of varying types and sizes in key end markets. The company’s success in this regard is a reflection of its technical expertise, its long-term relationships with clients, and its selective approach in identifying new prospects where it believes it has significant differentiators.

 

In the long-term, the company believes that world demand for electrical energy will continue to grow and solid-fuel-fired steam generators will continue to fill a significant portion of this incremental generating capacity. CFB steam generators have the flexibility to burn a variety of fuels other than coal and produce carbon-neutral electricity when fired by biomass. In addition, the company’s steam generators can be designed to incorporate supercritical technology, which can significantly improve efficiency and reduce emissions.

 

The company’s operations are concentrated in four particular industries (oil & gas, oil refining, chemical/petrochemical and power). It may be adversely impacted by economic or other developments in these industries.

 

Worldwide operations involve risks that may limit or disrupt operations, limit repatriation of cash, increase taxation or otherwise adversely affect its business, financial condition, results of operations and cash flows.

 

We currently have a Neutral recommendation on Foster Wheeler.