Texas engineer Fluor Corporation has revealed that it made a loss of $1.7b from a revenue of $14.3bn for 2019.
The company said $731m of that figure related to valuation allowances to reduce tax, $533m was accounted for by impairment, restructuring and other exit costs, and $138m related to the settlement of its UK pension plan.
The figure follows a profit of $323m in 2018 from revenue of $15.2bn.
Carlos Hernandez, Fluor’s chief executive, said: "Today’s filing marks the culmination of a thorough review of the financial reporting on a significant number of our lump-sum projects. We agree with the findings of the special committee and are moving forward with our remediation plan.
"Fluor continues to have substantial liquidity and dedicated employees who are ready to tackle current and future challenges."
As of the end of August 2020, Fluor’s cash balance was $2.1bn and the company said it expected the cash balance to be approximately in that range through the end of the year.
Hernandez was referring to a committee formed of independent members of the board of directors that was scrutinising the company’s previously issued financial information.
It determined there were project-related errors, and Fluor has restated its results for 2016, 2017, and 2018, and for each of the interim previously issued quarterly periods for 2018 and 2019. These adjustments reduced cumulative pre-tax earnings to 30 September 2019 by $3.8m.
In addition, the company determined that its disclosure controls and procedures were not effective. To address these weaknesses, Fluor’s remediation plan includes additional training, new project monitoring procedures, improved guidance on project forecasting principles, updated tools and templates to achieve a greater degree of standardisation of project-level documentation and reporting.
The company also announced that it was suspending all previous guidance for its performance in 2020 owing to volatility in commodity prices and the global disruption from the pandemic.
In terms of its business segments, Energy & Chemicals reported a loss of $95m, Mining & Industrial reported a profit of $159m, Infrastructure & Power made a loss of $244m, and Diversified Services reported a profit of $15m. Â
The "Other" segment, comprising small modular reactor business NuScale and the Radford and Warren government projects, reported a loss of $220m, of which $66m were due to NuScale’s expenses.
Image: Fluor’s headquarters in Irving, Texas (Fluor)