Norway’s Aker Solutions Q1 net income falls steeply; sales up 12.4%

08 May 2013 08:52  [Source: ICIS news]

LONDON (ICIS)--Aker Solutions’ first-quarter net profit in 2013 fell steeply to Norwegian kroner (Nkr) 269m ($46m, €35m) from Nkr526m in the same period last year, despite revenue rising 12.4% to Nkr11.1bn, the oil-platform maker said on Wednesday.

The company said earnings in the quarter were impacted by increased costs to deliver on its Ekofisk Zulu platform project as work was accelerated to ensure delivery on time, operational challenges in its Umbilicals (UMB) business, and some write-offs in the mining business of its Drilling Technologies (DRT) segment.

Aker Solutions also attributed delayed awards of projects for its Well Intervention Services (WIS) and Mooring and Loading Systems (MLS) for lower earnings.

The group’s earnings before interest, tax, depreciation and amortisation (EBITDA) amounted to Nkr868m in the first quarter, compared with Nkr1.04bn in the year-earlier period.

The EBITDA margin was 7.8% in the quarter, down from 10.6% in the corresponding period last year.

However, Aker Solutions said its order intake in the first quarter was Nkr25.5bn, up from Nkr11.3bn a year earlier.

“The company's order backlog was bolstered by new contract awards for subsea production systems in key markets such as Brazil, West Africa and Norway. The subsea business accounted for 27% of total revenue at the end of the first quarter, followed by the maintenance, modifications and operations business with 26% and the drilling technologies business with 21%,” Aker Solutions said.

Oyvind Eriksen, executive chairman of Aker Solutions, said: "The long-term trend in our main markets is positive."

"At the same time, we have recently seen that some customers are taking longer to make final decisions to award contracts. This makes it more difficult to predict short-term market developments," he added.

Aker Solutions affirmed its expectation that earnings will be higher in the third and fourth quarters of 2013 compared with the same quarters a year earlier.

($1 = Nkr5.84, €1 = Nkr7.65)

By: Franco Capaldo
+44 (0)20 8652 3214

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