There was a three per cent reduction in the order book to £2.9bn due to the phasing of orders. New orders totalled £1.0bn (£1.0bn in H1 2010) with some market segments improving, a trend we expect to continue through 2011. Significant orders in the period included:
MT30 gas turbines and water jets for a ten-ship contract for the Lockheed Martin designed Littoral Combat Ship by the US Navy, our largest surface ship contract to date.
UT design and systems integration packages for the Oil & Gas sector for more than £100m by customers in Italy, Brazil, Norway, Singapore and China.
A £100m contract for the design and provision of equipment for six UT776 offshore supply vessels by the Blue Sea Group.
Revenues reduced by 14 per cent due to 25 per cent lower OE revenues, mainly in the Merchant and Offshore sectors. This was partially offset by an 11 per cent increase in services revenues.
Profit increased by three per cent, supported by better revenue mix and unit cost improvements.
Our continued investment in the network of service centres included the opening of new facilities in Rotterdam, Gdynia and Walvis Bay, with more to open in the second half. We now have a dockside presence in 35 countries and see opportunities to add further centres in the future.
The PWR3 nuclear reactor was selected by the UK MoD as the propulsion choice for the next generation of nuclear powered submarines.
Tognum will add complementary products and scale to our existing portfolio and systems integration capabilities.
Full Year Outlook
Demand for sophisticated offshore Oil & Gas exploration and production capabilities, and for cleaner, more efficient vessels is encouraging, with order flow expected to improve in the second half of 2011.
Revenues in 2011 are expected to be similar to 2010, reflecting weaker OE revenues despite a strong improvement in the second half. This will be partially offset by further double digit growth in services revenues.
Profit for the full year is expected to be broadly similar to that in 2010.