Babcock & Wilcox Vølund A/S, an affiliate of energy engineering and construction services provider The Babcock & Wilcox Company BWC, has entered into deals with Copenhagen Infrastructure Partners, a fund management company. The deals are valued at over $220 million.
Per the contracts, Denmark-based Babcock & Wilcox Vølund is expected to design and construct a biomass power plant – basically a multi-fuel boiler − in Rotherham, UK. The plant will have a DynaGrate® fuel combustion system and a dry flue gas desulfurization system. The unit is anticipated to generate electricity of 40 megawatts after burning waste wood.
The construction of the plant will likely be completed by the third quarter of 2017. Once the plant starts working, Babcock & Wilcox Vølund will provide maintenance and operational services for a period of 15 years initially.
With the contract, Babcock & Wilcox Vølund is in a better position to capture the European market as demand for biomass power is growing in the continent. Investors should note that that the recent contract marks the fourth major renewable energy development in the continent during the last seven months.
Last month, The Babcock & Wilcox Company declared its fourth-quarter 2014 results. Earnings per share – excluding one-time items − came at 64 cents, surpassing the Zacks Consensus Estimate of 45 cents and the year-ago adjusted figure of 52 cents. Significant contribution from the Nuclear Operations segment aided the results.
Currently, The Babcock & Wilcox Company carries a Zacks Rank #3 (Hold), implying that the stock will perform in line with the broader U.S. equity market over the next one to three months.
Meanwhile, some better-ranked players in the energy sector are Valero Energy Partners LP VLP, EnLink Midstream Partners LP ENLK and Shell Midstream Partners LP SHLX. While Valero Energy sports a Zacks Rank #1 (Strong Buy), EnLink Midstream and Shell Midstream hold a Zacks Rank #2 (Buy).
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