Leading technology, engineering, procurement and construction company KBR Inc. KBR recently won a contract from one of the world’s largest chemical firm, OJSC Togliattiazot (ToAZ). The contract, of undisclosed value, requires KBR to provide licensing, basic engineering design, front-end engineering and other design services for upgrading seven ammonia plants of ToAZ in the Togliatti and Samara region of Russia.
KBR will also supply proprietary ammonia technology to the Russian ammonia producing company for enhancing the overall production as well as energy efficiency of the plants. Per the contract, KBR will deploy its “industry-standard setting technology” to slash the production costs and boost performance of ToAZ.
KBR’s successful track record of providing licensing, design and engineering and/or construction services to over 230 ammonia plants across the globe has already established its reputation in the highest echelons of the industry. This made KBR a perfect pick for ToAZ, when the latter planned to expand its existing facility.
Revenues won from this contract will be registered in second-quarter 2015 order backlog for the company’s Engineering & Construction and Technology & Consulting business lines. Winning this contract comes as a comfort for the company, considering that revenues from the Technology & Consulting and Engineering & Construction segments had fell 20.9% and 14.1%, respectively, in the first quarter (read more: KBR Tops Q1 Earnings on Operational Strength).
We believe such contracts will supplement KBR’S top-line growth in the near term, as the company depends on beneficial award wins and new technological advancements to a large extent for growth. Over the past few years, KBR has been trying relentlessly to improve plant reliability, reduce energy consumption, minimize life-cycle costs for plants and enhance operational effectiveness in fertilizer plants. We expect the company to win more contracts going forward, backed by its unparalleled market expertise and profound industry knowledge.
KBR currently carries a Zacks Rank #2 (Buy). Other well-ranked stocks in the industry include AECOM ACM, VSE Corp. VSEC and Capstone Turbine Corp. CPST. All three stocks carry the same Zacks Rank as KBR.
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