The general contractor for the Saudi Arabia Wasit gas field project once again altered the offshore schedule preventing CRTS from executing planned pipe weld coating activities in the third quarter. The revised schedule calls for the offshore installation of the 36-inch trunk pipelines to resume in November, nearly three months later than the previous plan. The result of this scheduling change is a reduction in the contribution from this project for the third and fourth quarters, shifting a majority of the remaining profit contribution into 2014. In the third quarter of 2013, Aegion recognized a $2.8 million reversal of the earnout as negotiated in the CRTS acquisition because of this delay. North America and the Middle East remain the primary Energy and Mining markets driving expected performance in the fourth quarter for United Pipeline Systems and Corrpro. The fourth quarter is traditionally a strong period for Bayou’s Canadian pipe coating operations ahead of the winter construction season. Given the delay in the CRTS/Wasit project and soft market conditions in the Gulf of Mexico, South America, and Mexico, full year 2013 revenues for Energy and Mining will likely be in the range of $465 to $470 million with operating margins of 9 to 10 percent, excluding the contribution from Brinderson. Brinderson got off to a good start in the third quarter contributing $47.9 million in revenues and gross profit of $8.5 million. Brinderson has a strong backlog position for the fourth quarter supporting expectations for revenue contributions in the second half to be approximately $115 million at mid-teens gross margins.
The fourth quarter is expected to be the most profitable quarter for the International Water and Wastewater segment as the European business traditionally has a strong quarter to conclude the year and progress on several key projects in Australia and Malaysia supports an anticipated operating profit for the Asia-Pacific business - the first in several years. Full year 2013 outlook for the International Water and Wastewater segment is to deliver operating income in the $3 million to $4 million range for the European segment, while operating income in the Asia-Pacific region is expected to be a modest loss of approximately $1.0 million.