FWLT in 2nd Phase of Sasol's Project - Analyst Blog
September 19 2011 - 4:15AM
Zacks
Foster Wheeler
AG’s (FWLT) Global Engineering and Construction Group
received a contract to provide engineering, procurement and
construction management (EPCm) services for Sasol Chemical
Industries Ltd.’s Sasolburg Utilities Expansion Project at
Sasolburg, South Africa.
Though the contract has been added
to Foster Wheeler’s second-quarter 2011 bookings, the contract
value was not disclosed. The expected completion period of the
project is second-quarter 2012.
Sasol has a list of expansion
projects underway and the current project, which aims at expanding
the capacity of the utility systems at the Sasol complex at
Sasolburg, is part of it. Foster Wheeler was involved in the
front-end engineering design (FEED) phase for this project, upon
successful completion of which it was awarded the EPCm
contract.
Longer term, Foster Wheeler
believes that world demand for electrical energy will continue to
grow and that solid-fuel-fired steam generators will continue to
fill a significant portion of this incremental generating capacity.
The fuel-flexibility of CFB steam generators enable them to burn a
variety of fuels other than coal and produce carbon-neutral
electricity when fired by biomass. In addition, the company’s steam
generators can be designed to incorporate supercritical technology,
which significantly improves efficiency and reduces emissions.
However, the company is subject to
various environmental laws and regulations in the countries in
which it operates. If it fails to comply with these laws and
regulations, it may incur significant costs and penalties that
could materially adversely affect its business, financial
condition, results of operations and cash flows. Its business may
be adversely impacted by regional, national and/or global
requirements to significantly limit or reduce greenhouse gas
emissions in the future.
Foster Wheeler AG is based in Zug
Switzerland, but its operational headquarters are in Clinton NJ
USA. The majority of Foster’s revenues and new businesses originate
from outside the United States. The company serves the
following industries: Oil and Gas; Oil Refining; Chemical &
Petrochemical; Pharmaceutical; Environmental; Power Generation; and
Power Plant Operation and Maintenance. Major competitors of Foster
Wheeler are Fluor Corporation (FLR) and
Jacobs Engineering Group Inc. (JEC).
We continue to maintain a Neutral
rating on Foster Wheeler, with a Zacks #3 Rank (Hold
recommendation) over the next one-to-three months.
FLUOR CORP-NEW (FLR): Free Stock Analysis Report
FOSTER WHELR AG (FWLT): Free Stock Analysis Report
JACOBS ENGIN GR (JEC): Free Stock Analysis Report
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