QUOTE AND NEWS
The Hindu Business Line  Feb 16  Comment 
Banks may shift from the present slab-rate Merchant Discount Rate (MDR) based on transaction value to merchant turnover based MDR structure, for which merchants have been suitably categorised, going ...
The Hindu Business Line  Feb 16  Comment 
The Reserve Bank of India on Thursday said it will reimburse banks the merchant discount rate (MDR) charges on debit cards used for paying the government tax and non-tax dues of up to ₹1 lakh with eff...
The Economic Times  Feb 7  Comment 
He said the Reserve Bank of India (RBI) is working to fix the Marginal Discount Charges (MDR) for debit card transactions above Rs 2 lakh.
The Hindu Business Line  Feb 5  Comment 
ANTIBIOTIC RESISTANCEMDR bacteria in ChinaA gene that makes bacteria resistant to colistin, an antibiotic of last resort, and that is transferrable between bacteria, has been found in a wide variety o...
The Economic Times  Feb 1  Comment 
Payment companies felt the issue was not addressed even after a heated debate on issues of lowering merchant discount rate (MDR) in recent months.
BBC News  Jan 30  Comment 
Tracey McDermott, once head of City regulation, has taken a top job at Standard Chartered.
Financial Times  Jan 29  Comment 
Shift from enforcement to banking follows flurry of moves through the revolving door




 
TOP CONTRIBUTORS

McDermott International (NYSE: MDR) is a leading engineering and construction company, with specialty manufacturing and service capabilities. McDermott focuses on executing complex offshore oil and gas projects worldwide, such as fixed and floating production facilities, pipelines, and subsea systems. McDermott’s customers include major energy companies. While the side effects of the BP (BP) Deepwater Horizon incident have made McDermott's Atlantic operations unprofitable, it may benefit from favorable offshore drilling legislation being considered by the U.S. Congress.

Business Growth

McDermott's revenues for the 2011 first quarter were $899.2 million, an increase of 78 percent, compared to $504.9 million in the corresponding period of 2010. The year-over-year increase was primarily due to increases in the Asia Pacific and Middle East segments as a result of higher marine activity on large engineering, procurement, construction and installation projects. These gains were partially offset by lower revenues in the Atlantic segment.[1]

Trends and Forces

Side effects of the BP (BP) Deepwater Horizon oil spill have made McDermott's Atlantic operations unprofitable

McDermott's Atlantic segment has reported a net loss, a side effect of the BP (BP) Deepwater Horizon oil spill. An explosion and fire aboard Transocean's Deepwater Horizon drilling rig off the coast of Louisiana ruptured an oil well, causing the worst oil spill in U.S. history. President Barack Obama ordered a six-month moratorium on drilling in waters 500 feet and deeper as the government investigated the disaster.[2] As a result, the Bureau of Ocean Energy Management, Regulation and Enforcement has been slow to issue new drilling permits in the Gulf of Mexico. This has adversely impacted McDermott's business in the Atlantic.

To help return the Atlantic segment to profitability, McDermott has installed new management, begun cutting costs and recently won new project contracts.[3]

New state and federal legislation favors the offshore drilling industry

Senators John Kerry, Lindsey Graham, and Joe Lieberman have drafted legislation that would boost the supply of domestically produced oil and natural gas, both on- and offshore. The legislation is intended to maximize tax revenue for states that opt to drill oil.[4] Although offshore drilling has traditionally been a controversial topic, the government is beginning to move forward legislation that will benefit the offshore drilling industry. Increasing levels of offshore drilling off the coast of the U.S. will benefit McDermott, as there will be more projects available for its Atlantic segment.

Competition

The substantial capital costs involved in becoming an offshore construction contractor create a significant barrier to entry into the market. McDermott, however, faces competition from regional competitors, engineering firms, fabrication facilities, pipelaying companies, and shipbuilding companies.[5]

References

  1. McDermott Investor Relations: "McDermott Reports Net Income from Continuing Operations of $68.8 Million, $0.29 Per Fully Diluted Share for the 2011 First Quarter"
  2. [http://www.forbes.com/2010/06/09/diamond-offshore-oil-markets-equities-bp.html Forbes: "Offshore Oil Companies Under The Microscope" 9 June 2010.]
  3. McDermott 10-K 2010: Letter to Shareholders
  4. Sumfolio: "Offshore Drillers Could See Upside"
  5. McDermott 10-K 2009, Competition, p. 7


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