Marine

Marine
£ millions20122011*Change

Order book

3,9542,73744%

Underlying revenue

2,2492,271-1%

Underlying OE revenue

1,2881,322-3%

Underlying services revenue

9619491%

Underlying profit before financing

2942872%

Return on sales**

13.1%12.6%0.5pp

*    2011 restated due to the transfer of Bergen to Engine Holding on 2 January as per Note 2 on p.20
**   By reference to underlying profit before financing costs and tax

Financial

  • The order book increased 44 per cent including new orders of £3.3bn (£2.1bn in 2011). These include the £1.1bn order by the UK MoD to deliver reactor cores for its future fleet of nuclear-powered submarines. Offshore orders reflected improved demand in the Oil & Gas sector, especially for drillships and support vessels in Brazil. This was partially offset by continued weak order flow in the Merchant sector.

    Significant orders in 2012 also included:

    • £147m of contracts in Brazil to design and equip 18 drillships, Offshore Supply Vessels (OSVs) and Platform Supply Vessels (PSVs) for Atlantico Sul on behalf of Petrobras, Navegação São Miguel and Bravante Group.
    • £119m of contracts to design and equip 10 OSVs for Norway’s Farstad Shipping, China’s COSCO and Korea’s Hyundai.
    • A contract for MT7 gas turbine engines to power the US Navy’s future fleet of up to 73 hovercraft, known as the Ship-to-Shore Connector, working with Textron.
    • A contract with the US Navy to supply MT30 gas turbines and propulsion systems for the two latest vessels in the Littoral Combat Ship programme.
    • A contract with the Republic of Korea’s Navy to supply the MT30 to power a new FFX frigate. This is the first order for the MT30 in Asia.
  • Revenue reduced by one per cent, reflecting increased pricing pressure and adverse foreign exchange movements. Both OE and services revenue improved in the second half reflecting improvement in the offshore sector and better capture of the services market resulting from the recent expansion of our global network of services centres.  
  • Profit increased by two per cent due to better revenue mix and cost reduction, partially offset by pricing pressures and adverse foreign exchange movement.

Portfolio

  • The reactor core contract with the UK MoD includes the regeneration of the manufacturing facility in Derby. The phased re-build will provide a leading-edge manufacturing facility with the highest standards of safety to support future programme needs.
  • Our innovative commercial ship design capability was extended with a new team formed to design ships for navies, coastguards and other maritime agencies. Ship design enhances our ability to offer integrated systems solutions.
  • Our market leading LNG-fuelled C engine was approved for sale in the US by the Environmental Protection Agency (EPA). The C engine positions us well for opportunities that will arise from stricter environmental standards from 2016.

 

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