Welcome!

News Feed Item

Dresser-Rand Announces its Plan to Suspend Operations at its Pig Manure Treatment Facilities in Spain due to Proposed Spanish Regulation

Expects to Achieve Record Sales and Earnings in the Fourth Quarter and Full Year of 2013 before the Possible Impact of the Proposed Spanish Regulation and Provides Preliminary Guidance for 2014

HOUSTON, Feb. 17, 2014 /PRNewswire/ -- Dresser-Rand Group Inc. ("Dresser-Rand" or the "Company") (NYSE: DRC) announced today that it is planning to suspend operations at its pig manure treatment facilities in Spain as a result of the potential implementation of a new Spanish regulation that, if adopted, would significantly reduce beneficial tariffs for its plants in Spain.

The Company owns and operates six pig manure treatment facilities in Spain, which operated under the Electrical Special Regime tariffs. The Spanish government recently published a draft regulation that reflects a reduction in the tariffs of approximately 37%, which, if enacted, would be retroactive to July 2013. In view of the pending change in the tariffs, the Company has decided to suspend the operations at its six facilities, although discussions with the Spanish government are ongoing.

The Company noted that these facilities were part of Grupo Guascor's renewables business acquired in May 2011. At the time, in its valuation of the assets, The Company did not record any specific intangibles for these facilities.

If the draft regulation is enacted as proposed, or in the event of no material change in the status of the proposed regulation before the Company files its 2013 Form 10-K, the Company would be required under U.S. GAAP to reduce 2013 operating income by (1) approximately $25 million due to the retroactive reduction of the tariffs and (2) up to approximately $50 million due to asset impairments. Without taking into account the possible impact of the proposed regulation, 2013 revenues and operating income associated with the six facilities is estimated to be approximately $138.0 million and $5.7 million, respectively.

The Company is also updating its guidance based on its preliminary and unaudited results for the fourth quarter, which is subject to change. The Company noted two items previously discussed in its third quarter 2013 earnings call and that were included in its guidance for the fourth quarter that did not occur. First, it did not sell the three photovoltaic power plants (Kaggio) to MBB Clean Energy AG.  Second, the Company was unable to recognize revenue in the fourth quarter on its shipment of equipment for a pipeline project in Central Asia due to pending contractual and administrative matters.  The impact of these two items is approximately $19 million of operating income. If these two items had occurred in the fourth quarter, the Company believes its operating income for full year 2013 would have been between $400 million and $410 million.

Further, if there is no material change in the status of the proposed Spanish regulation before the Company files its 2013 Form 10-K, the Company will be required to reduce its 2013 operating income by up to an estimated $75 million. In that event, its full year 2013 operating income could be between approximately $306 million and $316 million.   

Vincent R. Volpe Jr., President and Chief Executive Officer of Dresser-Rand, said, "Our fourth quarter operating income before the potential impact of the proposed Spanish regulation is expected to be at a record level for our Company; however, it will be lower than our earlier expectation due primarily to the two items mentioned above.  Additionally, we expect to report a record level of aftermarket bookings for 2013, and while new unit bookings for 2013 were affected by project delays during the course of the year, especially in the upstream part of the business, we had a strong level of bookings in the fourth quarter 2013. We also saw in the fourth quarter improvement in our net working capital and operating margins."

Before any impact of the proposed Spanish regulation, the Company expects revenues for 2014 to be approximately $3.0 billion to $3.2 billion, with operating income approximately 3% to 5% higher than 2013 due to productivity gains from its operational excellence initiatives. The Company noted that because the Spanish regulation has not yet been finalized there is the possibility that plant operations remain suspended and it currently believes the impact on 2014 results would be to reduce revenues and operating income by approximately $125 million and $15 million (including estimated restructuring costs), respectively. Conversely, if there is a need to restructure and the Spanish government subsequently adopts more favorable regulations, the Company's 2014 results could be positively impacted by reinstated operations, the possible recovery of part or all of the above mentioned approximately $25 million charge and a lower cost base.

Further information will be provided by the Company during its upcoming quarterly earnings release and teleconference expected to take place at the end of February 2014.    

About Dresser-Rand

Dresser-Rand is among the largest suppliers of rotating equipment solutions to the worldwide oil, gas, petrochemical, and process industries.  The Company operates manufacturing facilities in the United States, France, United Kingdom, Spain, Germany, Norway, and India, and maintains a network of 49 service and support centers (including 6 engineering and R&D centers) covering more than 150 countries.

This news release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements include, without limitation, the Company's plans, objectives, goals, strategies, future events, future bookings, revenues, or performance, capital expenditures, financing needs, plans, or intentions relating to acquisitions, business trends, executive compensation, and other information that is not historical information.  The words "anticipates", "believes", "expects", "intends", "appears", "outlook," and similar expressions identify such forward-looking statements.  Although the Company believes that such statements are based on reasonable assumptions, these forward-looking statements are subject to numerous factors, risks, and uncertainties that could cause actual outcomes and results to be materially different from those projected.  These factors, risks, and uncertainties include, among others, the following: economic or industry downturns; the variability of bookings due to volatile market conditions, subjectivity clients exercise in placing orders, and timing of large orders; volatility and disruption of the credit markets; its inability to generate cash and access capital on reasonable terms and conditions; its inability to implement its business strategy to increase aftermarket parts and services revenue; its ability to comply with local content requirements; delivery delays by certain third party suppliers of large equipment; cost overruns and fixed-price contracts; its ability to implement potential tax strategies; competition in its markets; failure to complete or achieve the expected benefits from any future acquisitions; economic, political, currency and other risks associated with international sales and operations; fluctuations in currencies and volatility in exchange rates; loss of senior management; environmental compliance costs and liabilities; failure to maintain safety performance acceptable to its clients; failure to negotiate new collective bargaining agreements; a failure or breach of our information system security; unexpected product claims and regulations; infringement on its intellectual property or infringement on others' intellectual property; its pension expenses and funding requirements; difficulty in implementing an information management system; and the Company's brand name may be confused with others.  These and other risks are discussed in detail in the Company's filings with the Securities and Exchange Commission at www.sec.gov.  Actual results, performance, or achievements could differ materially from those expressed in, or implied by, the forward-looking statements.  The Company can give no assurances that any of the events anticipated by the forward-looking statements will occur or, if any of them does, what impact they will have on results of operations and financial condition.  The Company undertakes no obligation to update or revise forward-looking statements, which may be made to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events, except as required by applicable law.  For information about Dresser-Rand, go to its website at www.dresser-rand.com.

DRC-FIN

SOURCE Dresser-Rand Group Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
The increasing popularity of the Internet of Things necessitates that our physical and cognitive relationship with wearable technology will change rapidly in the near future. This advent means logging has become a thing of the past. Before, it was on us to track our own data, but now that data is automatically available. What does this mean for mHealth and the "connected" body? In her session at @ThingsExpo, Lisa Calkins, CEO and co-founder of Amadeus Consulting, will discuss the impact of wea...
Much of the value of DevOps comes from a (renewed) focus on measurement, sharing, and continuous feedback loops. In increasingly complex DevOps workflows and environments, and especially in larger, regulated, or more crystallized organizations, these core concepts become even more critical. In his session at @DevOpsSummit at 18th Cloud Expo, Andi Mann, Chief Technology Advocate at Splunk, will show how, by focusing on 'metrics that matter,' you can provide objective, transparent, and meaningfu...
Digital payments using wearable devices such as smart watches, fitness trackers, and payment wristbands are an increasing area of focus for industry participants, and consumer acceptance from early trials and deployments has encouraged some of the biggest names in technology and banking to continue their push to drive growth in this nascent market. Wearable payment systems may utilize near field communication (NFC), radio frequency identification (RFID), or quick response (QR) codes and barcodes...
Manufacturers are embracing the Industrial Internet the same way consumers are leveraging Fitbits – to improve overall health and wellness. Both can provide consistent measurement, visibility, and suggest performance improvements customized to help reach goals. Fitbit users can view real-time data and make adjustments to increase their activity. In his session at @ThingsExpo, Mark Bernardo Professional Services Leader, Americas, at GE Digital, will discuss how leveraging the Industrial Interne...
The IETF draft standard for M2M certificates is a security solution specifically designed for the demanding needs of IoT/M2M applications. In his session at @ThingsExpo, Brian Romansky, VP of Strategic Technology at TrustPoint Innovation, will explain how M2M certificates can efficiently enable confidentiality, integrity, and authenticity on highly constrained devices.
In his session at 18th Cloud Expo, Sagi Brody, Chief Technology Officer at Webair Internet Development Inc., will focus on real world deployments of DDoS mitigation strategies in every layer of the network. He will give an overview of methods to prevent these attacks and best practices on how to provide protection in complex cloud platforms. He will also outline what we have found in our experience managing and running thousands of Linux and Unix managed service platforms and what specifically c...
There is an ever-growing explosion of new devices that are connected to the Internet using “cloud” solutions. This rapid growth is creating a massive new demand for efficient access to data. And it’s not just about connecting to that data anymore. This new demand is bringing new issues and challenges and it is important for companies to scale for the coming growth. And with that scaling comes the need for greater security, gathering and data analysis, storage, connectivity and, of course, the...
Many private cloud projects were built to deliver self-service access to development and test resources. While those clouds delivered faster access to resources, they lacked visibility, control and security needed for production deployments. In their session at 18th Cloud Expo, Steve Anderson, Product Manager at BMC Software, and Rick Lefort, Principal Technical Marketing Consultant at BMC Software, will discuss how a cloud designed for production operations not only helps accelerate developer...
Redis is not only the fastest database, but it has become the most popular among the new wave of applications running in containers. Redis speeds up just about every data interaction between your users or operational systems. In his session at 18th Cloud Expo, Dave Nielsen, Developer Relations at Redis Labs, will shares the functions and data structures used to solve everyday use cases that are driving Redis' popularity.
See storage differently! Storage performance problems have only gotten worse and harder to solve as applications have become largely virtualized and moved to a cloud-based infrastructure. Storage performance in a virtualized environment is not just about IOPS, it is about how well that potential performance is guaranteed to individual VMs for these apps as the number of VMs keep going up real time. In his session at 18th Cloud Expo, Dhiraj Sehgal, in product and marketing at Tintri, will discu...
Increasing IoT connectivity is forcing enterprises to find elegant solutions to organize and visualize all incoming data from these connected devices with re-configurable dashboard widgets to effectively allow rapid decision-making for everything from immediate actions in tactical situations to strategic analysis and reporting. In his session at 18th Cloud Expo, Shikhir Singh, Senior Developer Relations Manager at Sencha, will discuss how to create HTML5 dashboards that interact with IoT devic...
As the rapid adoption of containers continues, companies are finding that they lack the operational tools to understand the behavior of applications deployed in these containers, and how to identify issues in their application infrastructure. For example, how are multiple containers within an application impacting each other’s performance? If an application’s service is degraded, which container is to blame? In the case of an application outage, what was the root cause of the outage?
SYS-CON Events announced today that Ericsson has been named “Gold Sponsor” of SYS-CON's @ThingsExpo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. Ericsson is a world leader in the rapidly changing environment of communications technology – providing equipment, software and services to enable transformation through mobility. Some 40 percent of global mobile traffic runs through networks we have supplied. More than 1 billion subscribers around the world re...
In the world of DevOps there are ‘known good practices’ – aka ‘patterns’ – and ‘known bad practices’ – aka ‘anti-patterns.' Many of these patterns and anti-patterns have been developed from real world experience, especially by the early adopters of DevOps theory; but many are more feasible in theory than in practice, especially for more recent entrants to the DevOps scene. In this power panel at @DevOpsSummit at 18th Cloud Expo, moderated by DevOps Conference Chair Andi Mann, panelists will dis...
Whether your IoT service is connecting cars, homes, appliances, wearable, cameras or other devices, one question hangs in the balance – how do you actually make money from this service? The ability to turn your IoT service into profit requires the ability to create a monetization strategy that is flexible, scalable and working for you in real-time. It must be a transparent, smoothly implemented strategy that all stakeholders – from customers to the board – will be able to understand and comprehe...