Yearly operating profit at CH2M’s Environment and Nuclear business rose 7 percent year over year to $83 million in an otherwise-tough 2016, the Englewood, Colo.-based engineering company reported this week.
Gross revenue in the segment, which includes the company’s Cold War cleanup work with the Energy Department’s Office of Environmental Management, was just over $2 billion: up 33 percent from 2015. For the fourth quarter, segment operating profit landed at roughly $14.5 million; that was down just over 5 percent from the prior year, even as quarterly revenue rose roughly 25 percent to about $610 million.
CH2M is also in the midst of a reorganization that, by the time the company releases its next earnings report, will see the legacy cleanup business shuffled from the Environment and Nuclear segment into the new national governments group.
CH2M last year announced it would replace its four vertically integrated, industry-focused business units with three horizontal units aligned with the company’s main customer groups: national governments; state and local governments; and the private sector.
As part of the restructuring, CH2M will cut about 3 percent of its global workforce of roughly 22,000. In addition, John Ciucci last year stepped down as president of Hanford Site central plateau cleanup contractor CH2M Plateau Remediation Co. He was replaced by Ty Blackford, a Hanford Site veteran.
Overall, CH2M squeaked out a profit of $15 million, or roughly 3 cents a share, in 2016. That was due in great part to a $115 million loss in the company’s transportation segment, which itself was driven by hundreds of billions of dollars in cost growth on highway contracts in the U.S. and Australia. Costs related to the ongoing corporate restructuring also factored into the difficult 2016, in which earnings fell sharply from net income of more than $80 million, or over $2.50 a share, in 2015.
Besides leading plateau cleanup at DOE’s Hanford Site under a 10-year contract awarded in 2008 and worth roughly $6 billion, CH2M is the junior partner in the AECOM-led UCOR: prime contractor for demolition and decommissioning of the former uranium enrichment campus at the Oak Ridge site in Tennessee under a nine-year contract awarded in 2011 and worth roughly $2.5 billion.
CH2M also leads the CH2M Hill BWXT West Valley joint venture that handles cleanup of the West Valley Demonstration Project in upstate New York under a roughly $525 million contract awarded in 2011 and good through at least early 2020.
