KBR, Inc. (NYSE:KBR) Q3 2023 Earnings Call Transcript

Unidentified Analyst: Very helpful. And then in STS, can you talk about any major new contracts that you might be targeting and expected timing of any award decisions there?

Stuart Bradie: Yeah, I guess the biggest, I mean, there’s a lot happening in STS across the world. It’s a multifaceted portfolio. We do a lot for many different customer sets across that energy trilemma as we explained. I would say that the largest news, I think, in the market really is probably coming out of Saudi. I mean, they’re expected to be the largest economy or the largest growing economy or the fastest growing economy for the next couple of years, as you’re probably aware. They’re putting a lot of capital to work as they diversify their economy. There’s a lot going on from de-carbonization thematic where they’re stopping burning crude for power, replacing that with gas and we’re heavily engaged in that. And then with that crude, they’re trying to extend the value chain by turning it into petrochemicals.

And so, there’s a substantial new program with four or five major crackers associated with it. And it’s a huge integrated portfolio of investment, running up hundreds of billions of dollars. It’s out for bid now in terms of pre-feed and feed and project management. And if that comes through, I think if we can win our fair share of that and we’ve got a good relationship in Saudi and we really like working with Aramco, we really understand how they operate and we’ve got a long history of doing well mutually. And so, if we can win our fair share there, that’s very exciting and quite sizable and multi-year. And I think that’s probably the largest we think that there’ll be noise about that coming through in Q4. That’s probably the largest one out there.

And I think if that comes through, I think also nice coming through in this quarter was more reimbursable LNG work, which I know a number of people felt that Plaquemines could not be, it would be more than just Plaquemines. And I think we’ve proven that that’s not the case and that there are mature customers out there that like to work in the risk model that we can tolerate and take our sort of high-end capability to help them succeed as we look to use, I guess, gas as a transition fuel and also around energy security. So, I think that’s all good. But what’s happening across the world in terms of ammonia, in terms of more ammonia cracking opportunities, you probably saw that, Mura, the plastics recycling partner or the investment we have in Mura, that they’ve opened the doors, if you like, for business.

And there was a big delegation there, in fact, just last week. And I was with the CEO at the tail-end of last week and very positive of mapping up productions moving to Q1 next year. So, again, I think that’s all exciting. So, more will come once that’s happening, I’m sure, in the plastics recycling arena. So, sorry, a long answer to a short question, but there’s so much excitement around SDS. There’s a lot happening across the portfolio. And that goes from, obviously, the oil refineries opportunities in Saudi to the global ammonia opportunities to hydrogen cracking in Korea to what’s happening across the world in Australia and energy security, et cetera. So, it’s a very global business and not to mention what’s happening in the U.S. with all the additional funding around the de-carbonization, Tamarack and the Ira Bill.

So, I think all good in that arena. Sorry, it’s a long answer, but we’re quite excited about SDS.

Unidentified Analyst: No, terrific. Thanks so much.

Operator: Our next question today comes from Mariana Perez Mora of Bank of America. Your line is open. Please go ahead.

Samantha Stiroh: Hi, good morning. This is Samantha Stiroh, I’m from Mariana. I was just wondering about, you talked a little bit about at the beginning, the head-count ramp, what you’re seeing with that and then particularly as you see the strong growth in SDS, do you have the headcount in place already to kind of keep up with that?