KBR Wins Raizen's FCC Contract, Fortifies Technology Unit
KBR, Inc. KBR has won a contract to modernize Raizen Argentina’s Fluid Catalytic Cracking (FCC) unit at the latter’s Buenos Aires Refinery.
Per the deal, KBR’s Sustainable Technology unit will offer industry-leading reaction and catalyst regeneration technologies for FCC’s New Configuration Project. This will help Raizen achieve higher unit profitability, enhanced on-stream availability and a lower carbon footprint.
Sustainable Technology Business a Boon for KBR
KBR developed the world's first commercial FCC unit in 1942 and licensed the world's first Resid FCC process in 1961. Since 1985, it has accomplished more than 200 FCC grassroots and restored projects across the globe. Moreover, KBR's FCC-based processes and proprietary catalysts help refiners integrate refineries, and petrochemical plants to maximize operational flexibility as well as margins.
Additionally, the segment integrates proprietary KBR technologies, knowledge-based services and the company’s three specialty consulting brands — Granherne, Energo and GVA — under a sole customer-centric business across the world. KBR, with focus on climate change, has developed and/or designed several sustainable as well as renewable fuel projects across the globe over the past decade.
Overall, it has been driving growth by focusing on lowering emissions, product diversification, energy efficiency, and more sustainable technologies as well as solutions. Demand for the company’s technologies across ammonia for food productions, olefins for non-single-use plastics, and in refining for product diversification and more green solutions to meet tighter environmental standards has been strong. A strategic shift to IP-enabled maintenance is gaining traction and KBR — which shares space with AECOM ACM, Jacobs Engineering Group Inc. J and Quanta Services Inc. PWR in the Zacks Engineering - R and D Services industry — continues to see increasing activity across the advisory portfolio, particularly in energy transition.
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Solid Backlog Level & Share Performance
As of Mar 31, 2021, total backlog was $14.6 billion compared with $15.1 billion at 2020-end. Of the total backlog, Government Solutions booked $12.3 billion. The Sustainable Technology Solutions segment accounted for $2.3 billion of the total backlog.
KBR’s shares have gained 27.2% in the past six months, outperforming the industry’s 25.9% growth. Also, earnings estimates for 2021 have moved up 0.5% over the past 60 days, depicting analysts' optimism over bottom-line growth potential. The Zacks Consensus Estimate for the Zacks Rank #3 (Hold) company’s 2021 earnings indicates a 22% increase from 2020. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
KBR’s solid prospects are backed by continuous contract wins, strong project execution, backlog level, and potential government as well as technology businesses. Effective Jan 1, 2021, it implemented a strategic change and transitioned from a three-core business segment model to a two-core business segment model comprised Government Solutions and Sustainable Technology Solutions.
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