Fluor Corporation (FLR) has been awarded the Hijau Gasoil Phase-1 project in Malaysia by Shell Refining Company. The work involves construction of a new 6,000 ton-per-day diesel processing unit at Port Dickson, Malaysia.
Fluor will carry out the engineering, procurement and commissioning of the plant and will book revenues from the contract in the third quarter of 2010. More than 650 professionals are likely to be employed by Fluor and the work is going to be carried out from the Philippines, The Netherlands and onsite in Kuala Lampur.
Fluor stands out as one of the few engineering and construction companies having the technological expertise, logistics, procurement capabilities and project management experience needed for a large variety of projects, including large complex projects for a diverse group of industrial and government clients virtually anywhere in the world.
Given its strong financial position, Fluor will have ample financial resources to pursue a niche acquisition program aimed at strengthening its considerable service breadth. The company is delivering solid results driven by its diversified business model and targeted new awards strategy.
Flour is one of the best-in-class E&C companies with a favorable contract mix, diverse service offerings, and strong relationships around the world; allowing it to sustain operating margin going forward relative to its peers without diminishing its growth potential. The firm believes project wins in the next few quarters will face intense competition, raising concerns over potential margins on any new awards.
The current worldwide financial crisis will likely affect a portion of its client base, as well as subcontractors and suppliers, and could materially affect its backlog and profits. Backlog is subject to unexpected adjustments and cancellations and, therefore, may not be a reliable indicator of future earnings.
The Industrial & Infrastructure segment provides design, engineering, procurement and construction services, for new construction and refurbishment, to the transportation, wind power, mining and metals, life sciences, telecommunications, manufacturing, commercial and institutional development, microelectronics and healthcare sectors.
Fluor Corporation is one of the largest professional services firms, providing engineering, procurement, construction and maintenance as well as project management services on a global basis. It serves a diverse set of industries worldwide including oil and gas, chemical and petrochemicals, transportation, mining and metals, power, life sciences and manufacturing. It is also a major service provider to the U.S. federal government.
We currently have a Neutral recommendation on Fluor Corporation.
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