Renaissance Services releases strong 3Q results

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Renaissance Services (SAOG), Omani multinational oil and gas services provider, released strong 3Q results with revenue rising by 6 per cent to US$486.5mn in the nine-month period ending September 2010, up from $457.4mn last year.

Renaissance Services results beat many analyst's expectations and posted operating profit that increased to US$84.5 million against US$72.2mn in Q3 of 2009; while net profit rose to US$54.2mn, up nearly 20 per cent from US$45.8mn in 2009.

Samir Fancy, the chairman of Renaissance Services, described the growth projections of the company in a statement saying:“Our company has a credible growth story; strong, differentiated and defendable existing market positions; sound industry fundamentals; an experienced management team; and a flexible, resilient financial business model.”

All three main business divisions of Renaissance - marine, engineering and contract services - posted stronger results, with the Marine group showing the biggest increase with a 17.6 per cent Q-o-Q increase. Topaz Energy and Marine is the UAE-based marine offshore and engineering outfit.

Topaz Marine's strong performance is due in large to the increasing of the companies fleet of offshore service vessels including new ships, Topaz Commander and Topaz Captain. This is in stark contrast to the sector worldwide which has been retiring more vessels than it has been replacing.

The smaller Engineering division, which has been affected by the drop in global oil and gas industry spending, enjoyed an increase in operating margins as a result of a rise in the number of contracts awarded in the past quarter. The division gives needed support to the top line by providing 30 per cent of the company total revenue.

The company's final division, Contract Services Group, witnessed a slight decline in operating margins by 12.8 per cent in the Q3 of 2010, down from 14.4 per cent in the 2Q of 2010.

Renaissance Services plans US$1.36 billion of capital spending between this year and 2012, of which it has already spent US$250mn. "We now have the capital in place to meet the entire 2010-2012 investment programme within the company's strong cash flows and headroom for leverage on our balance sheet," said Mr Fancy.

On top of the investment programme Topaz Marine is also looking at expanding into other future oil markets, in particular, Brazil and West Africa. “Topaz Marine has the opportunity to replicate its success in the Caspian and MENA markets by following future oil," said Samir Fancy in a statement.

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