AKRON, Ohio - Babcock & Wilcox Enterprises, Inc. (NYSE:BW), an Ohio-based energy and environmental services provider, has finalized the sale of its Babcock & Wilcox Renewable Service A/S (BWRS) subsidiary to Hitachi (OTC:HTHIY) Zosen Inova AG, a Swiss firm. The transaction, which closed on Friday, involved the transfer of BWRS for $87 million, subject to customary adjustments and fees.
BWRS, which employs over 160 individuals, specializes in aftermarket parts and services for waste-to-energy plants primarily in Northern Europe and the UK. The sale is part of B&W's broader strategy to streamline its business by divesting non-core assets, aiming to reduce its long-term debt and optimize its capital structure.
Kenneth Young, B&W's Chairman and Chief Executive Officer, stated that the proceeds from the sale would bolster the company's liquidity and support working capital needs. Young also reiterated the company's commitment to its Full Year 2024 Adjusted EBITDA target range of $105 million to $115 million, which excludes expenses related to its BrightLoop™ and ClimateBright™ technologies.
B&W continues to focus on its core technologies, such as the DynaGrate® combustion grate and state-of-the-art boilers, which support renewable energy projects. The company anticipates leveraging these technologies in European and global markets for new builds and large upgrade projects.
This news is based on a press release statement from Babcock & Wilcox Enterprises, Inc. The company, headquartered in Akron, Ohio, is recognized for providing energy and environmental products and services to power and industrial markets around the world.
In other recent news, Babcock & Wilcox Enterprises (B&W) has secured contracts totaling over $18 million for its Environmental segment, aimed at designing and supplying upgrades for electrostatic precipitators at utility and industrial plants in the United States and Europe. The company's first-quarter results for 2024 exceeded expectations, with new contracts and awards reaching approximately $500 million. However, total revenue decreased to $84.1 million, with adjusted EBITDA dropping to $1.7 million. Notably, B&W's environmental business segment saw a 23% increase in revenue and a 74% rise in adjusted EBITDA.
In a significant development, B&W has partnered with NorthStar Clean Energy to convert a former coal-fired power plant in Filer City, Michigan, into a Bioenergy with Carbon Capture and Storage (BECCS) facility. This project will utilize B&W's proprietary SolveBright technology to capture up to 550,000 tons of CO2 annually. The company is also shifting its focus towards power generation upgrades, environmental and renewable technologies, as well as hydrogen and syngas projects.
InvestingPro Insights
Babcock & Wilcox Enterprises, Inc. (NYSE:BW) has taken a vital step in its strategy to improve financial stability with the recent sale of its subsidiary. The move is aimed at reducing the company's significant debt burden, aligning with an InvestingPro Tip that highlights the company's struggle with debt management. This decision may also help address concerns regarding the company's ability to make interest payments on its debt, which is another key point raised in InvestingPro Tips.
From a financial perspective, Babcock & Wilcox's market capitalization stands at $131.97M, reflecting the company's current value in the market. Despite the challenges, the company has reported a revenue growth of 9.1% over the last twelve months as of Q1 2024, suggesting resilience in its core operations. However, investors should note that the company's stock price has experienced significant volatility, with a 1-week price total return of -17.61%, yet a strong 1-month price total return of 23.93%. This volatility is also echoed in an InvestingPro Tip that points out the stock's recent sharp decline and its overall poor performance over the last decade.
For those interested in a deeper analysis of Babcock & Wilcox's financial health and future prospects, additional InvestingPro Tips are available. Subscribers to InvestingPro can access these insights, which could prove invaluable in making informed investment decisions. To benefit from these insights, readers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With a total of 16 additional tips listed in InvestingPro, investors can gain a comprehensive understanding of the company's financial position and outlook.
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