BUSINESS

Shawcor says second-quarter profits rise driven by higher gross profits

08/08/2013 07:36 EDT | Updated 10/08/2013 05:12 EDT
TORONTO - Shawcor Ltd. (TSX:SCL) says an improvement in gross margins helped the pipeline services company's profits rise 152 per cent in the second quarter.

The Toronto-based firm said Thursday that quarterly net income increased to $53.9 million, or 91 cents per share, compared to $21.4 million, or 30 cents per share a year earlier.

Operating income at the company was helped by a 69 per cent increase in its gross profits to $192.2 million and a gain from more favourable currency exchange rates.

Revenue grew to $457.3 million from $326.9 million.

Earlier this year, Shawcor completed its acquisition of the remaining 49 per cent stake in the Socotherm Labarge joint venture in the Gulf of Mexico that it didn't already own. Including bank debt, the deal was worth $30 million.

The quarterly results were stronger despite "significant start up costs associated with two important deepwater coating facility mobilizations in the Socotherm group," said president and CEO Bill Buckley in a release.

"ShawCor continues to be well positioned to benefit from the on-going trend for global pipeline infrastructure investment."

The company has an order backlog of $778 million as of June 30, it said.