KBR, Inc. (KBR - Free Report) , in conjugation with NIPIneftegas JSC, is set to establish a new engineering and support services company — KBR-NIPILLP — in Kazakhstan.
The JV will provide engineering, procurement, design and related services for projects across the oil and gas sector within the Republic of Kazakhstan. Also, it will develop technical requirements for all stages of a project like project management, contract supervision, planning and cost control. Additionally, it will train and educate the local Kazakh workforce, while managing construction contractors and subcontractors.
The company has been working in Kazakhstan since 1993 and has employed nearly 200 Kazakh specialists on various projects. Notably, it’s Energy Solutions segment looks forward to mobilize its expertise, innovative systems and low-cost energy solutions for supporting new projects in Kazakhstan.
Energy Solutions Business Bodes Well
Energy Solutions, which accounted for 23.8% of total 2019 revenues, recorded solid top-line growth of 80.5% in first-quarter 2020. The upside was supported by several reimbursable EPC projects that commenced in 2019 along the U.S. Gulf Coast and expanded services on a global basis.
The company’s consulting business has been witnessing increased activity over the last few quarters on the back of efficient reutilization and a strong pricing environment. Moreover, an increasing portfolio of smaller and OpEx-facing projects, services, program management, as well as maintenance contracts are providing it with a stronger foundation than the previous years.
Owing to solid performance and prospects, its shares have outperformed the industry in the past year. Notably, the company is banking on strength across businesses to optimize growth potential. Also, steady backlog growth is adding to KBR’s bliss. It believes that a healthy balance between energy and government projects positions it well for future growth.
Despite COVID-19 impacts and a soft energy market, KBR’s business continues to be resilient, backed by mission critical government services and proprietary technology solutions. Also, the recent JV within the energy market is likely to add to the positives.
KBR — which shares space with Gates Industrial Corporation plc (GTES - Free Report) , Quanta Services, Inc. (PWR - Free Report) and AECOM (ACM - Free Report) in the same 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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