Argan, Reports Q2 Results

Argan, Inc. (NYSE: AGX) has announced financial results for its second quarter ended July 31, 2017, the company said.

Revenues increased to a quarterly record of USD 260 million, up 60% compared to the prior year quarter, primarily due to Gemma Power Systems (GPS) having reached peak construction activities on four large, natural gas-fired power plants.

The power industry services segment continues to drive our financial results and represents 92% of consolidated revenues for the quarter ended July 31, 2017. Gross profit increased 17% to USD 51 million, primarily due to the increased revenues, while gross margin percentage decreased from 27.1% to 19.8% compared to the prior year quarter, which primarily reflected the achievement of the substantial completion of two natural gas-fired power plant projects in the prior year period.

For the six months ended July 31, 2017, consolidated revenues increased 67% to a record USD 490 million over the prior year period, primarily due to GPS having ramped up and reached peak construction activities on four large, natural gas-fired power plants.

The power industry services segment also represented 92% of consolidated revenues for the six months ended July 31, 2017. Gross profit increased 27% to USD 92 million, primarily due to the increased revenues, while gross margin percentage decreased from 24.7% to 18.7% compared to the prior year period, which primarily reflected the reason discussed above, the changes in the mix and progress of various power plant projects and the differences in their respective gross margins.

Argan´s primary business is providing a full range of services to the power industry including the engineering, procurement and construction of natural gas-fired power plants, along with related commissioning, operations management, maintenance, project development and consulting services, through its Gemma Power Systems and Atlantic Projects company operations.