Chicago Bridge & Iron Company (CBI) has won a contract of approximately $40 million from the Oman Refineries and Petrochemical Company for engineering design and project consultancy services for the Sohar Refinery Expansion Project in the Sultanate of Oman.
The project aims to augment the capacity of the existing Sohar Refinery from 116,000 to 187,000 barrels per day.
Chicago Bridge & Iron Company is a worldwide provider of fully integrated specialty engineering, procurement and construction (EPC) services and related licensed processes, primarily used by the energy markets for large-scale storage and refining of liquids and gases.
We believe the stock will continue to outperform over the near term. The company’s improving outlook and strong fundamentals only strengthen its appeal.
CBI designs, procures, fabricates and builds facilities and major equipment for power industry customers around the globe. Its expertise encompasses both traditional and emerging technologies, including electric, cogeneration nuclear, LNG, hydroelectric and wind power.
The business depends on major construction projects from clients, the unpredictable timing of which may result in significant fluctuations in cash flow and earnings due to timing between the award of the project and payment under the contract.
Revenue and earnings may be adversely affected by a reduced level of activity in the hydrocarbon industry, especially in light of the global financial and economic crisis.
The company’s improving outlook and strong fundamentals strengthen our belief that the stock will continue to perform well over the near term. A major competitor of Chicago Bridge & Iron Company is Matrix Service Co. (MTRX).
Chicago Bridge & Iron Company N.V. is a worldwide provider of fully-integrated specialty engineering, procurement and construction services and related licensed processes, primarily used by energy markets for large-scale storage and refining of liquids and gases.
The company segments its operations into four broad market sectors: Liquefied Natural Gas (LNG), Energy Processes, Steel Plate Structures, and Lummus Technologies.
We currently maintain a Neutral recommendation on Chicago Bridge & Iron Company.
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