Aker Solutions Books Lower Quarterly Profit

Aker Solutions has reported a net income of NOK 169 million, or NOK 0.37 in the third quarter 2016 versus net income of NOK 220 million, or 0.75 NOK a year earlier.

Revenue declined to NOK 6 billion in the quarter from NOK 7.5 billion a year earlier amid a market slowdown.

In Subsea segment Aker Solutions revenue dropped to NOK 3.5 billion in the quarter from NOK 4.5 billion a year earlier.

In the company’s Field Design segment, which includes MMO and Engineering, revenue fell to NOK 2.5 billion in the Q3 2016 from NOK 3 billion in Q3 2015.

The company posted earnings before interest and taxes (EBIT) of NOK 286 million compared with NOK 329 million a year earlier.

At the end of the quarter the order backlog was NOK 32 billion, about 60 percent of which was for projects to be delivered outside Norway.

In its third quarter earnings report Aker Solutions said: “The outlook for oil services remains challenging and projects are being postponed across the industry. There are some signs of a recovery, primarily in the brownfield segment, amid expectations that oil prices will stabilize at a higher level in 2017. Industry cost cuts are having an effect, with break-even costs coming down on projects, which may allow some major developments to be sanctioned in the next 12 months.

“Aker Solutions’ greatest growth potential is outside of Norway, where the company has been expanding. Tendering activity is healthy and totals about NOK 50 billion. The company continues to be vigilant about its workforce capacity to ensure it fits market conditions.

In Subsea, Aker Solutions targets a move over time toward peer-group margins and a return on average capital employed (ROACE) of 20-25 percent in the medium term.”

Subsea World News Staff