Fluor Corporation Announces Strategic Review Results
Fluor Corporation (NYSE: FLR) announced today the results of its strategic review and operational review.
As a result of the strategic review, the company concluded that the divestitures of select businesses will simultaneously improve the financial stability of the company and allow the remaining businesses to refocus on engineering, construction and maintenance services in core markets. The company is initiating plans to sell its construction equipment rental company (AMECO) and its government business, and to monetize surplus real estate and non-core investments. Fluor anticipates these actions to generate in excess of $1 billion in aggregate proceeds.
In addition, the company plans to reduce its quarterly dividend to $0.10 per share beginning with the next quarterly dividend declaration.
The strategic review evaluated the entire portfolio of businesses including Stork, COOEC-Fluor Heavy Industries and NuScale. The company has taken deliberate and constructive action on these investments:
- Stork continues to implement its restructuring plan and is expected to emerge as a stronger and more profitable business in early 2020.
- The company is in discussions with its COOEC-Fluor Heavy Industries partner to improve the financial performance of the fabrication yard.
- NuScale has the only small modular reactor (SMR) technology being reviewed by the Nuclear Regulatory Commission and it expects final approval of its SMR by the end of 2020. Commitments from new investors Doosan Heavy Industries & Construction and Sargent & Lundy, subject to regulatory approval, are expected to allow the funding of NuScale activities for the remainder of this year. Recent milestones achieved by NuScale have generated additional investor interest that is expected to offset 2020 funding requirements.
“Together with our Board of Directors and outside advisors, we took an extensive and comprehensive look at our broader business to determine the best strategic path to return the company to consistent profitable growth,” said Carlos Hernandez, chief executive officer, Fluor Corporation. “The strategic direction we are pursuing as a result of this process builds upon Fluor’s premier competitive position in our core markets in which we expect to deliver sustainable growth, strong cash flow and attractive returns to investors. With this review behind us, we are focusing more than ever before on long-term value creation and operational excellence, and we remain dedicated to moving Fluor forward for the benefit of all of our stakeholders.”