Construction markets show promise, poised for second-half recovery – Foster Wheeler
Global engineering and construction (E&C) markets are showing signs of strengthening, with industry revenues likely to rise in the second half of 2011, the interim chief executive of contractor Foster Wheeler said on Tuesday.
“We continue to view 2011 as a transition year,” CEO Umberto della Sala said in the company’s first-quarter earnings release.
“We already see signs of the markets strengthening, and these improvements in our served markets are expected to have a stronger impact on backlog and revenue in the second half of the year,” he added.
Mr. della Sala forecasts 2011 revenues and scope backlog for the company’s global engineering and construction group to be above 2010.
“We expect the full-year EBITDA margin on scope revenue to be in the range of 13-15%,” he said.
Meanwhile, Mr. della Sala expects 2011 scope revenue to be “up sharply” in Foster Wheeler’s global power group, with EBITDA margins in the range of 14-16%.
However, the company’s first-quarter earnings of $23mn were down dramatically from a $72m profit in the 2010 first quarter.
Revenues from new order bookings were down significantly, which Foster Wheeler credited to delays in the timing of expected large boiler contracts.
The company predicts such bookings will pick up during the second half of 2011.
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