Norway: Aker Profit Climbs

Aker Solutions’ earnings for the third quarter of 2013 showed a steady improvement in profit compared with the first half of the year, helped by improved execution in several business areas and key deliveries. The EBITDA margin rose to 9.8 percent in the quarter from 7.9 percent in the first half.

“Improvement programmes in several business areas, including umbilicals, subsea and well-intervention services, started to pay off in the third quarter,” Executive Chairman Øyvind Eriksen said. “We passed some important milestones, with the Skandi Aker vessel beginning a two-year contract in September and with the delivery in July of the Ekofisk Zulu platform, which achieved first oil production in October.”

The four largest business areas – subsea, drilling technologies, engineering and maintenance, modifications and operations (MMO) – accounted for 82 percent of sales and 75 percent of EBITDA. The subsea and drilling technologies units increased their revenue in the quarter, compared with a year earlier, while the engineering and MMO divisions had somewhat weaker sales.

Subsea, the biggest business area, widened its profit margin to 10.9 percent from 8.7 percent a year earlier, aided by better project execution and strong subsea-services activity in Norway. Improvement programmes also boosted the earnings of the well-intervention services and umbilicals businesses. Umbilicals posted its first quarterly profit for the year after strengthening operations at a Norwegian plant and winning key contracts in the US.

Outlook

Aker Solutions experiences robust demand for its products and services in most markets and is well-positioned in the fast-growing deepwater offshore segment. Order intake and tender activity remain strong. At the same time, oil companies have delayed some projects amid cashflow concerns, increasing uncertainty about future investments and the timing of contract awards to oil-services providers.

Aker Solutions on 30 October agreed to sell its mooring and loading systems business to Cargotec for an enterprise value of NOK 1.4 billion. Proceeds from the sale will be used to develop the company’s main business in the deepwater and subsea oil-services segments, building on a strategy to deepen the focus on core growth segments.

1 Norwegian krone = 0.167499 U.S. dollars

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LNG World News Staff, November 06, 2013