KBR to Deploy SCORE & MTO Recovery Technologies in China

KBR, Inc. KBR has received two process technology licensing and design packages contracts from Ningxia Baofeng Energy Group Co. Ltd (Baofeng Energy). Per the deal, KBR’s Technology Solutions team will support the latter’s 500KTA coal to olefins and 500KTA C2-C5 comprehensive utilization projects to be built in Ningdong Town, Lingwu City, Ningxia, China.

Notably, KBR will use its best-in-class SCORE steam cracking and methanol to olefins (MTO) recovery technologies to achieve Baofeng Energy's project objective of highest yields with lowest capital investment. Moreover, this complex will be the largest single-train MTO plant in the world and produce 1 million tons of olefins annually, post completion.

KBR's Integrated & Innovative Solutions Bode Well

KBR has been delivering innovative and reliable process technologies to help refinery and petrochemical plants to offer optimum production and lower operating costs over the past several years. The company has been delivering petrochemical manufacturers with 50 years of expertise to produce ethylene, propylene, acetyls, phenolics, vinyls and other specialty products from a variety of feedstocks in a safe and efficient manner.

KBR has a diversified business portfolio, which helps it combat cyclicality associated with any single market. Presently, the company has been banking on strength of the Government Solutions (GS) and Technology Solutions (TS) segments to optimize growth potential.

As of Jun 30, 2020, its total backlog came in at $12.59 billion, of which GS booked $10.52 billion and TS accounted for $561 million. Government and Technology units had a book-to-bill ratio of 1 and 1.5, respectively, excluding the impact of long-term PFIs. The segment has been performing well in recent times, driven by refining and petrochemical projects in China, India and Africa, as well as strong technologies demand.

Shares of KBR have outperformed the industry in the past six months. Its shares have performed pretty well owing to the ongoing contract wins, acquisitions and robust organic growth.

We believe that the recent contract wins will further boost KBR’s performance. Moreover, its recent agreement with Arlington Capital Partners to acquire Centauri, LLC — a leading independent provider of high-end space, directed energy and other advanced technology solutions — will boost revenues, given attractive and growing federal sectors aligned with DoD and intelligence priorities that benefit from bipartisan support.

Zacks Rank

KBR — which shares space with Fluor Corporation FLR, Jacobs Engineering Group Inc. J and AECOM ACM in the same industry — currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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