French oil rig developer Technip missed forecasts with a 16.5 per cent drop in 2005 profit as one-off charges offset robust sales growth, but the company remained upbeat for 2006 after a rise in orders.

Full-year net profit came in at 93.3 million euros ($111 million), against a restated 111.8 million euros in 2004, after an accounting charge linked to a convertible bond issue and another linked to a contract dispute.
Technip said in a statement it would redeem the convertible bond in March, an early redemption that could result in the issue of new shares but would also cut future financial charges.
“This decision should lead to value creation for our shareholders," Technip said, noting the financial charge associated with the bond amounted to 38 million euros in 2005.
Earnings per share would be either slightly or strongly boosted by the move, depending on the extent to which bond holders decided to exercise their options or take cash, the company said.
Technip maintained an upbeat outlook, pointing to an orders backlog on December 31 of 11.17 billion euros.
“The market reaction might be slightly negative as some bondholders will likely sell their positions because the strike price (46.75 euros per share) is not far from the current share price or because they do not have the right to hold shares,” analysts at Societe Generale wrote in a research note.
Technip reiterated its 2006 target of achieving an operating margin of over five per cent on sales of around 6.8 billion euros, assuming an average exchange rate of $1.25 to the euro.