Aker Solutions Books Lower Profit

Aker Solutions has reported net income of NOK 131 million or NOK 0.37 per share in the second quarter 2016 versus net income of NOK 209 million or NOK 0.73 a year earlier.

In addition, first-half 2016 net income fell to NOK 300 million from NOK 428 in 1H 2016, while EPS was NOK 0.90 versus NOK 1.52 a year earlier.

Revenue declined to NOK 7 billion in the quarter from NOK 8 billion same time last year on oil-services market slowdown and some projects neared completion. Revenue in the first half of 2016 fell to NOK 13.4 billion from NOK 16.5 billion a year earlier.

The company posted earnings before interest and taxes (EBIT) of NOK 319 million compared with NOK 376 million in the correspondiong period in 2015. The EBIT margin narrowed to 4.6 percent from 4.7 percent.

In Subsea segment Aker Solutions revenue dropped to NOK 4.3 billion in the quarter from NOK 4.8 billion a year earlier. Subsea revenue was NOK 8.1 billion in the first half of 2016, down from NOK 9.9 billion a year earlier.

In the company’s Field Design segment, which includes MMO and Engineering, revenue fell to NOK 2.7 billion in the Q2 2016 from NOK 3.3 billion in Q2 2015.

At the end of the quarter the order backlog was at NOK 35 billion, against NOK 44 billion at the end of Q2 2015.

“The market outlook for oil services remains challenging. Oil companies continue to postpone projects amid a tough commercial environment and sustained pressure on prices. Cost-cutting efforts across the industry are having an effect as project break-even costs come down. While activity offshore Norway is largely expected to remain subdued this year, there are signs that the region may start to see a gradual recovery from 2017. Aker Solutions’ greatest long-term growth potential is outside of Norway, where the company has expanded in recent years,” the company said in its earnings report.

Subsea World News Staff