Revenue surge at Primoris drives profit 44% higher in Q4

ConDig (28-Feb-19).  Dallas, Texas-based construction and infrastructure company Primoris Services Corp reported a 44% boost in profit in the fourth quarter as revenue across all the company’s divisions surged. 

Primoris booked a 51% boost in revenue to $877.7 million in the year ended December 31, 2018, compared with $579 million in the same period a year earlier. Primoris said the increase was primarily due to incremental revenue from acquisitions and organic growth in its pipeline division.

This helped drive up net income to $32.4 million, or $0.63 per fully diluted share, compared with $22.5 million, or $0.44 per fully diluted share, the fourth quarter a year earlier. 

It comes as revenue in the power segment increased 18.5% in the fourth quarter to $33.1 million. The increase in revenue was primarily due to increases from an oil field maintenance services program and a refinery project, both in Southern California, as well as revenue from Canadian operations of its Willbros acquisition. But gains were partially offset by declining revenue from its Carlsbad joint venture as that project achieved substantial completion in the fourth quarter 2018. 

Revenue in the pipeline division increased 10% to $23 million, while revenue in the utilities segment increased 13.8% to $32.8 million. The transmission division posted a 10% rise in revenue to $12.2 million and 1.9% in the civil division to $2 million. 

For the year 2018, net income at Primoris hit a record $77.5 million, up from $72.4 million in 2017, while revenue was also a record $2.9 billion compared with $2.4 billion the year before.

David King, president and chief executive office of Primoris, said the company’s gas and electric work provides a reliable recurring base of revenue, while 2019 is expected to be robust as it reports strong end-market demand.

“While the timing of large project work can be uncertain, we believe we have the right balance between recurring and project based opportunities. Our business units are working together to pursue projects across the renewable, petrochemical, utilities, power, and refining industries,” he said.

“We are encouraged by our client’s staunch support for a major pipeline project that has faced considerable legal challenges, and opportunities for small diameter pipeline work remain strong.”

Last week, Primoris unveiled that it had secured a $30 million master service agreement to construct and install natural gas distribution main and service pipelines in the Midwest.

In November, Primoris landed two contracts worth a total of $17 million for a new industrial gas plant in Louisiana, while it also secured a $90 million maintenance renewal contract with an unnamed oil producer.

In August, Primoris announced that it had secured a number of pipeline and underground contracts worth a total of $145 million.

US construction expenditure posted a moderate gain of 0.8% in November to a seasonally adjusted annual rate of $1.3 trillion from a revised $1.29 trillion in October, according to latest figures from the Commerce Department.