14th May 2014 10:23
LONDON (Alliance News) - Industrial support services company Cape PLC Wednesday said that overall trading for the first quarter ended March 31 was in line with expectations.
The energy and mining support services firm said that market conditions remained mixed, with strong demand in the Middle East and North Africa region, offsetting low levels of demand for construction in Asia and the Commonwealth of Independent States, as well as maintenance in Australia. Cape said the UK market remains at similar levels to last year.
The Group order book at the end of the quarter stood at GBP732 million, up from GBP648 million a year earlier, boosted by strong order intake from the Middle East and North Africa region.
"Given the steady performance in the first quarter, the current view of market conditions and the operational progress of the business, the board remains confident that the business overall is on track to deliver in line with expectations for the year ending 31 December 2014," the company said in a statement.
Cape said that trading in the UK, Europe and the Commonwealth of Independent States region performed as expects in the first quarter, with strong volume in the UK onshore market offsetting lower than expected volume in the UK offshore market and very low levels of project activity in Kazakhstan, following the completion of its work associated with the Kashagan project.
"Constructive discussions are ongoing with Cape's partner in Azerbaijan regarding the commercial structure of the joint venture and the business is now actively bidding for a number of significant new construction projects within the country," the company said in a statement.
Cape said that the joint venture would likely require a material investment during the year, in support of both existing and future projects.
In the Middle East and North Africa region, Cape said that revenue and operating profit exceeded expectations in the quarter, having achieved strong order intake in the period, driven by a number of construction project awards in Saudi Arabia, as well as the renewal of a key term maintenance contract in Qatar.
Activity levels in the Asia Pacific region were hit by delays to the mobilisation of the Wheatstone contract in Australia and low levels of activity in Hong Kong prior to the renewal of the key term maintenance contract, Cape said.
It said the Wheatstone project is now mobilising and volumes are expected to ramp up through the year.
In a statement last month, Cape said its subsidiary Cape Hong Kong Fuji (CHKF) has been awarded a three-year contract with an unnamed power supplier in Hong Kong, for the provision of safe access services and associated services.
Cape said it expects to announce its results for the first-half of the year ending June 30, on August 27.
Cape shares were trading 1.3% higher Wednesday morning, at 295.13 pence.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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