Press release from CNW Group
ShawCor Announces Operational Update
Thursday, January 09, 2014
ShawCor Announces Operational Update17:01 EST Thursday, January 09, 2014
TORONTO, Jan. 9, 2014 /CNW/ - ShawCor Ltd (TSX: SCL) today announced that, based on a preliminary review of fourth quarter operating results, it expects to report significantly lower earnings for its fourth quarter of fiscal year 2013 compared with the record earnings reported in the third quarter. These preliminary estimates are being provided despite the fact that ShawCor's auditors have not completed their procedures with respect to such information nor completed their audit of ShawCor's results for the fiscal year 2013. ShawCor's actual results may differ materially from these preliminary estimates due to the completion of its financial closing procedures and other developments that may arise between now and the time the results for its fourth quarter and full year are finalized. ShawCor expects to report its fourth quarter and full year results on or about February 27, 2014.
ShawCor estimates that income from operations, before foreign exchange and one-time gains/losses, will decrease by approximately 50% to 60% from third quarter levels, primarily as a result of an approximately 50% reduction in revenue in Asia Pacific versus the third quarter and delayed start-up of several large projects that resulted in a significant negative impact on operating margins.
While ShawCor's expectation for reduced revenue and earnings from the third quarter had been previously communicated, the Company had anticipated starting full volume production in the fourth quarter on the Inpex Ichthys flow assurance pipeline project and large projects at facilities in Leith and Brazil. As a result of delays in approval to start production from the Company's clients, these projects are not expected to achieve full production volumes until the first quarter of 2014 at which time an improvement in revenue and earnings over fourth quarter levels is expected, although not to the record levels reported in the third quarter of 2013.
In addition to the reduction in income from operations noted above, ShawCor also expects to record net one-time after tax charges of approximately $7 million consisting of a loss from the previously announced sale of the Company's joint venture interest in Brazil and a charge for expenses incurred to reduce personnel at a number of the Company's global operations, partially offset by an after tax gain from the sale of a surplus property in Australia.
ShawCor Ltd. is an energy services company specializing in products and services for the pipeline and pipe services and the petrochemical and industrial segments of the oil and gas industry. The Company operates through eight divisions with over seventy-five manufacturing and service facilities located around the world.
This news release contains forward-looking information within the meaning of applicable securities laws. The terms "expects", "preliminary", "estimates" and similar terms are intended to identify this forward-looking information. This forward-looking information is based on assumptions, estimates and analysis made in the light of the Company's experience and its perception of trends, current conditions and expected developments, as well as other factors that are believed by the Company to be reasonable and relevant in the circumstances. Forward looking information involves known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from those predicted, expressed, or implied by the forward-looking information. The forward-looking information is provided as of the date of this news release and the Company does not assume any obligation to update or revise the forward-looking information to reflect new events or circumstances, except as required by law. Further details on key risks and uncertainties facing the Company can be found in the Company's Annual Information Form, particularly in the "Risk Factors" section and in the Company's annual and quarterly Management Discussion & Analysis, particularly in the "Risks and Uncertainties" section, which can be found online at www.sedar.com.
SOURCE ShawCor Ltd.
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