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KBR Wins Engineering Contract for BUA's Nigeria Facility

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KBR, Inc. (KBR - Free Report) has inked a contract from BUA Group, one of the leading agricultural and industrial chemicals conglomerates, to provide efficient and sustainable engineering solutions.

With this contract, KBR will accomplish Front-End Engineering Design or FEED for BUA Group's refinery facility in Nigeria. Its Sustainable Technology Solutions business unit is responsible for the contract work. Components of the work include sulphur removal facilities, water treatment facilities to meet high level environmental standards and heat integration to ensure long standing efficiency of production.

Notably, this refinery facility will help in fuel production for Nigeria's domestic and regional markets. This will also facilitate in reducing the country's dependence on imported supplies.

Jay Ibrahim, KBR President of Sustainable Technology Solutions, said, "KBR's Sustainable Technology Solutions business is committed to helping provide and shape sustainable and efficient solutions to its clients globally.” He further added, "This contract outlines our strong position as a market leader in this sector, and we are excited to continue working with BUA in this critical next phase of the project."

Solid Backlog Level & Share Performance

KBR’s solid performance is backed by continuous contract wins, strong project execution, backlog level, and potential government as well as technology businesses. Effective Jan 1, 2021, it implemented a strategic change and transitioned from a three-core business segment model to a two-core business segment model comprised of Government Solutions and Sustainable Technology Solutions.

The Technology Solutions segment — comprising 20.3% of the company’s total revenues — includes Energy Solutions, Technology Solutions and Non-strategic Business segments. This segment is anchored by innovative, proprietary process technologies.

As of Mar 31, 2021, total backlog was $14.6 billion compared with $15.1 billion at 2020-end. Of the total backlog, Government Solutions booked $12.3 billion. Sustainable Technology Solutions segment accounted for $2.3 billion of the total backlog.

In April, KBR secured a contract from JS Energy Limited for KBR’s K-PRO™ Propane Dehydrogenation (“PDH”) technology, which will help the latter to convert propane into propylene for a PDH project in Pakistan.

Its shares have surged 32.3% so far this year compared with the industry’s 30.9% rally. The company’s performance was backed by solid contract winning spree, strong project execution, backlog level, and potential government and technology businesses. On a further encouraging note, it has a robust earnings surprise history, having surpassed the Zacks Consensus Estimate in each of the trailing 13 quarters.

Zacks Rank

KBR — which shares space with AECOM (ACM - Free Report) , Jacobs Engineering Group Inc. (J - Free Report) and Quanta Services Inc. (PWR - Free Report) in the Zacks Engineering - R and D Services industry — currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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