AKRON, Ohio – Babcock & Wilcox Enterprises, Inc. (NYSE: BW), through its subsidiary Babcock & Wilcox Construction Co., LLC (BWCC), has secured a contract worth $25 million to perform upgrades and maintenance services at a thermal power plant in the United States. This project, scheduled for the plant’s Fall 2024 outage, aims to enhance the efficiency and reliability of the facility.
The contract includes boiler upgrades, pressure part replacements, and various outage and maintenance services, which are crucial for the continued operation of the coal power fleet that supplies about 20 percent of the U.S. electrical power. Mike Hidas, BWCC Vice President and General Manager, emphasized the company’s commitment to national energy security by maintaining the baseload generating assets.
BWCC, with multiple regional construction offices across the U.S. and Canada, is strategically positioned to swiftly address customer demands and manage projects effectively. Hidas also highlighted the team’s expertise and readiness to provide a comprehensive range of services for any size facility, ensuring safe and efficient delivery.
Babcock & Wilcox Enterprises, headquartered in Akron, Ohio, is recognized for its energy and environmental products and services across power and industrial markets globally.
The company has indicated that the press release contains forward-looking statements and acknowledges that there are risks and uncertainties involved. As per their policy, they do not intend to update these statements unless required by law. The announcement is based on a press release statement, and the information provided does not imply any endorsement or speculation regarding the company’s future performance or the broader industry impact.
In other recent news, Babcock & Wilcox Enterprises has been making significant strides in its financial performance and sustainability efforts. The company has amended its credit agreement, extending its maturity and rearranging financial obligations, a move that allows for asset sales and the rearrangement of financial responsibilities.
Simultaneously, Babcock & Wilcox has sold its subsidiary, Babcock & Wilcox Renewable Service A/S, to Hitachi (OTC:) Zosen Inova AG for $87 million. This sale is part of a broader strategy to streamline its business by divesting non-core assets.
In addition to these developments, the company has secured contracts totaling over $18 million for its Environmental segment. These contracts will enable the design and supply of upgrades for electrostatic precipitators at utility and industrial plants across the United States and Europe.
Furthermore, Babcock & Wilcox has partnered with NorthStar Clean Energy to convert a former coal-fired power plant in Filer City, Michigan, into a Bioenergy with Carbon Capture and Storage (BECCS) facility. This project will leverage Babcock & Wilcox’s proprietary SolveBright technology to capture up to 550,000 tons of CO2 annually.
Lastly, Babcock & Wilcox’s first-quarter results for 2024 exceeded expectations, with new contracts and awards reaching approximately $500 million. Despite a decrease in total revenue to $84.1 million and adjusted EBITDA to $1.7 million, the company’s environmental business segment saw a 23% increase in revenue and a 74% rise in adjusted EBITDA.
InvestingPro Insights
Babcock & Wilcox Enterprises (NYSE: BW) has recently announced a significant $25 million contract for upgrades and maintenance at a U.S. thermal power plant, a strategic move that aligns with the company’s expertise in energy and environmental services. The financial health and market performance of the company provide context to this development.
With a market capitalization of $120.14 million, Babcock & Wilcox operates in a challenging financial environment, underscored by a negative P/E ratio of -0.53 for the last twelve months as of Q1 2024. This figure further declined to -1.28 when adjusted, reflecting market skepticism about the company’s earnings potential. The company’s revenue grew by 9.1% over the same period, indicating some positive business momentum despite broader financial concerns.
InvestingPro Tips suggest that the company is grappling with a significant debt burden, which may pose challenges in meeting its interest payments. This is an essential factor for investors to consider, given that the contract is aimed at enhancing the efficiency and reliability of a power plant, which requires substantial investment and financial stability. Furthermore, analysts do not expect the company to be profitable this year, which is a critical consideration for potential investors.
Babcock & Wilcox’s stock price has experienced significant volatility, with a 19.02% decline in the last week alone and a sharp 74.62% drop over the past year. However, it’s worth noting that the stock has seen a strong return of 24.53% over the last three months, suggesting some recent investor confidence in the company’s direction.
For readers interested in a deeper analysis, there are additional InvestingPro Tips on https://www.investing.com/pro/BW that further elaborate on the company’s financial health and stock performance.
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