Aker Solutions Down on Impairments Despite Revenue Boost

Aker Solutions has seen red in the second-quarter 2019, as impairments affected the company’s bottom line, compared to same time last year.

The Norwegian services player booked Q2 2019 loss of NOK 11 million, against profit of NOK 117 million in the prior-year comparable period.

However, Earnings before interest, tax, depreciation and amortization (EBITDA), rose to NOK 623 million from NOK 439 million in Q2 2018.

Excluding special items, Q2 2019 EPS was NOK 0.56.

Impairments for the quarter were NOK 221 million, while in the same period last year the company hasn’t reported any impairment charges.

Revenue rose to NOK 7.5 billion in the quarter from NOK 6.3 billion a year earlier, driven by generally higher market activity and continued good progress on a number of key projects.

The EBITDA margin was 8.3 percent versus 7 percent a year earlier. Excluding special items, the margin was 8.4 percent compared with 7.1 percent a year earlier.

Aker Solutions said it is bidding for contracts totaling about NOK 55 billion. About two-thirds of these are in the subsea area, where the company expects some key projects to be awarded over the next six to 12 months, including in Brazil, Africa and Asia Pacific.

Aker Solutions sees overall revenue up by around 10 percent in 2019 from 2018, in particular driven by the high activity levels in the Field Design sub-segment in the first half and continued high tendering activity. The company maintains its outlook for full-year underlying EBITDA margins to be up year-on-year including the effects of IFRS 16. Excluding the effects of IFRS 16, the company expects full-year EBITDA margin around current levels.