Perma-Pipe International Holdings, Inc. Announces $43 Million Contract Award in the Middle East Region

Rhea-AI Summary

Perma-Pipe International Holdings (Nasdaq: PPIH) has secured a significant contract award valued at over $43 million for a development project in the GCC region. The company will provide thermal insulation, anti-corrosion coatings, and related services from its Abu Dhabi facility, with project commencement scheduled for Q3 2025.

The project will utilize Perma-Pipe's anti-corrosion coatings capabilities, fabrication, and the TRACE-THERM® insulation system, featuring spray-applied polyurethane foam with high-density polyethylene casing. This award follows successful previous projects in the region and contributes to the company's record backlog position heading into 2025.

Positive

• Secured new contract worth over $43 million in GCC region
• Project adds to record backlog position for 2025
• Demonstrates market validation of company's technical solutions
• Expands presence in active oil & gas markets

Negative

• Project execution won't begin until Q3 2025, indicating delayed revenue recognition

Insights

Financial Analyst

The $43 million contract award represents approximately 40% of PPIH's current market capitalization, making this a substantial win that could significantly impact the company's financial performance. The project's timing, starting in Q3 2025, suggests revenue recognition will likely begin in late 2025 and extend into 2026, providing strong revenue visibility.

The award strengthens PPIH's position in the Middle East's oil & gas infrastructure sector and demonstrates the company's competitive advantages in specialized coating solutions. The mention of a "record backlog position" heading into 2025, combined with this new contract, indicates robust demand and potential for sustained growth in the coming quarters.

For a company of PPIH's size, securing large-scale projects is important for maintaining steady revenue streams and operational efficiency. This contract, along with other recent awards, suggests improved capacity utilization at their Abu Dhabi facility, which could lead to better margins through economies of scale.

Industrial Technology Expert

The deployment of TRACE-THERM® insulation system with high-density polyethylene casing represents a sophisticated technical solution for challenging environmental conditions in the GCC region. This system's selection for a major project validates PPIH's technological edge in thermal management and anti-corrosion solutions.

The combination of spray-applied polyurethane foam with HDPE jacketing provides superior protection against both thermal loss and environmental degradation - critical factors in Middle Eastern climate conditions where temperature extremes and corrosive environments are common. The integration of fabrication services with coating capabilities demonstrates PPIH's comprehensive approach to pipeline protection, which creates higher barriers to entry for competitors.

SPRING, Texas--(BUSINESS WIRE)-- Perma-Pipe International Holdings, Inc. (Nasdaq: PPIH) today announced it has received a formal letter of award for a development project located in the GCC region. Perma-Pipe will provide thermal insulation, anti-corrosion coatings, and other services from its Abu Dhabi facility. Project commencement is expected to begin in the third quarter of 2025. The value of this project is estimated to exceed $43 million.

This project will utilize Perma-Pipe’s anti-corrosion coatings capabilities, fabrication, and the TRACE-THERM® insulation system, a spray-applied polyurethane foam jacketed with a high-density polyethylene casing.

Saleh Sagr, Sr. Vice President for Perma-Pipe’s MENA region, commented, “This award follows the successful execution of numerous development projects in the region. Our differentiated coating solutions have proven to be well-suited for technically challenging projects. We would like to thank our customers for this significant award.”

David Mansfield, President and CEO, commented, “This award provides evidence that our technologies are well-positioned to meet the complex requirements in virtually all geographies as we continue our focus on highly active oil & gas markets worldwide. This project continues an increase in large-scale project activity we are seeing globally and, when coupled with other recently announced project awards, further strengthens our record backlog position heading into 2025.”

Perma-Pipe International Holdings, Inc.

Perma-Pipe International Holdings, Inc. (Nasdaq: PPIH, “Perma-Pipe”, or the “Company”) is a global leader in pre-insulated piping and leak detection systems for oil and gas, district heating and cooling, and other applications. It uses its extensive engineering and fabrication expertise to develop piping solutions that solve complex challenges regarding the safe and efficient transportation of many types of liquids. In total, Perma-Pipe has operations at fifteen locations in six countries.

Forward-Looking Statements

Certain statements and other information contained in this press release that can be identified by the use of forward-looking terminology constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbors created thereby, including, without limitation, statements regarding the expected future performance and operations of the Company. These statements should be considered as subject to the many risks and uncertainties that exist in the Company's operations and business environment. Such risks and uncertainties include, but are not limited to, the following: (i) fluctuations in the price of oil and natural gas and its impact on customer order volume for the Company's products; (ii) the Company’s ability to purchase raw materials at favorable prices and to maintain beneficial relationships with its suppliers; (iii) decreases in government spending on projects using the Company’s products, and challenges to the Company’s non-government customers’ liquidity and access to capital funds; (iv) the Company’s ability to repay its debt and renew expiring international credit facilities; (v) the Company’s ability to effectively execute its strategic plan and achieve sustained profitability and positive cash flows; (vi) the Company's ability to collect a long-term account receivable related to a project in the Middle East; (vii) the Company’s ability to interpret changes in tax regulations and legislation; (viii) the Company's ability to use its net operating loss carryforwards; (ix) reversals of previously recorded revenue and profits resulting from inaccurate estimates made in connection with the Company’s "over-time" revenue recognition; (x) the Company’s failure to establish and maintain effective internal control over financial reporting; (xi) the timing of order receipt, execution, delivery and acceptance for the Company’s products; (xii) the Company’s ability to successfully negotiate progress-billing arrangements for its large contracts; (xiii) aggressive pricing by existing competitors and the entrance of new competitors in the markets in which the Company operates; (xiv) the Company’s ability to manufacture products free of latent defects and to recover from suppliers who may provide defective materials to the Company; (xv) reductions or cancellations of orders included in the Company’s backlog; (xvi) risks and uncertainties specific to the Company's international business operations; (xvii) the Company’s ability to attract and retain senior management and key personnel; (xviii) the Company’s ability to achieve the expected benefits of its growth initiatives; (xix) the impact of pandemics and other public health crises on the Company and its operations; and (xx) the impact of cybersecurity threats on the Company’s information technology systems. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are made only as of the date of this press release and we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. More detailed information about factors that may affect our performance may be found in our filings with the Securities and Exchange Commission, which are available at https://www.sec.gov and under the Investor Center section of our website (http://investors.permapipe.com.)

View source version on businesswire.com: https://www.businesswire.com/news/home/20250110203513/en/

David Mansfield, President and CEO

Perma-Pipe Investor Relations

847.929.1200

investor@permapipe.com

Source: Perma-Pipe International Holdings, Inc.

FAQ

What is the value of PPIH's new contract award in the GCC region?

The contract award for Perma-Pipe International Holdings in the GCC region is valued at over $43 million.

When will PPIH begin work on the new GCC region project?

The project is expected to commence in the third quarter of 2025.

What services will PPIH provide for the new GCC contract?

PPIH will provide thermal insulation, anti-corrosion coatings, and other services from its Abu Dhabi facility, utilizing their TRACE-THERM® insulation system.

How does this contract impact PPIH's backlog for 2025?

The contract contributes to strengthening PPIH's record backlog position heading into 2025.

What technology will PPIH use for the GCC region project?

PPIH will use their TRACE-THERM® insulation system, which includes spray-applied polyurethane foam jacketed with high-density polyethylene casing, along with anti-corrosion coatings.