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Aker Solutions — Interim / Quarterly Report 2018
Apr 27, 2018
3531_rns_2018-04-27_2fd88dea-5a39-4e00-af11-a9f5f869e303.html
Interim / Quarterly Report
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Aker Solutions ASA: First-Quarter Results 2018
Aker Solutions ASA: First-Quarter Results 2018
April 27, 2018
1Q 2018 Financial Highlights
* Revenue NOK 5.5 billion
* EBITDA NOK 425 million
* EBITDA margin 7.8%
* EBITDA ex. special items NOK 384 million
* EBITDA margin ex. special items 7.1%
* Earnings per share ex. special items NOK 0.31
* Order intake NOK 8.6 billion
* Order backlog NOK 37.6 billion
Aker Solutions' earnings strengthened in the first quarter of 2018 as orders
almost doubled from a year earlier amid increasing signs of a market recovery.
The company delivered strong execution on major projects globally and made good
progress on its cost-efficiency improvement program. These efforts helped
bolster margins compared with a year earlier.
"We are seeing increasing signs of a market rebound as lower break-even costs
and higher oil prices spur project sanctions, particularly in Norway," said Aker
Solutions Chief Executive Officer Luis Araujo. "Our consistently strong
execution and solid cost-efficiency improvements are supporting margins amid
tough international competition."
Orders totaled NOK 8.6 billion in the quarter, bringing the backlog to NOK 37.6
billion. Most were for projects in Norway, including a contract to deliver
modules for the floating production, storage and offloading vessel for Johan
Castberg, the largest oil discovery in the Barents Sea. The company also won
contracts to deliver subsea production systems for the Troll Phase 3, Askeladd
and Nova fields offshore Norway. It secured a maintenance and modifications
services contract from Petrobras in Brazil.
Aker Solutions was in the period awarded 38 front-end orders, the most in a
single quarter. That compares with an all-time high of 124 contracts for all of
"We are seeing record demand for our early-phase capabilities - from feasibility
and concept studies to front-end engineering and design," said Araujo. "Not only
is this an indication of a pickup in activity ahead, it also puts us in a strong
position to secure more work at a project."
Two of Aker Solutions' concept studies led to front-end engineering design
(FEED) work and seven FEEDs led to fully-fledged project work in the quarter.
Aker Solutions is on track with a program to boost cost-efficiency across the
business by at least 20 percent in the four years ending December 2021. This
follows the successful completion in 2017 of a two-year program of becoming at
least 30 percent more cost efficient across the business, compared with 2015
costs and work volumes.
Finances were solid, with a liquidity buffer of NOK 7.6 billion at the end of
the quarter. The company in the period issued a NOK 1.5 billion corporate bond
that was oversubscribed and renewed a five-year NOK 5 billion revolving credit
facility.
Revenue and EBITDA
Revenue rose to NOK 5.5 billion in the quarter from NOK 5.2 billion a year
earlier, driven by increased North Sea modifications work and good progress on
international projects. Earnings before interest, taxes, depreciation and
amortization (EBITDA) were NOK 425 million, compared with NOK 355 million a year
earlier.
The EBITDA margin was 7.8 percent versus 6.9 percent a year earlier. Excluding
special items, the margin was 7.1 percent compared with 7 percent a year
earlier.
Aker Solutions has two reporting segments: Projects and Services. Revenue in
Projects rose to NOK 4.2 billion in the quarter from NOK 4.1 billion a year
earlier, lifted by increased North Sea modifications work, good progress on
international projects and work secured through the acquisition of Reinertsen
last year. The EBITDA margin widened to 7.6 percent in the quarter from 6.6
percent a year earlier.
Revenue in Services rose to NOK 1.2 billion in the quarter from NOK 1.1 billion
a year earlier, helped by higher volumes in Asia Pacific, Canada and Brazil. The
EBITDA margin was 11.7 percent in the quarter versus 14.2 percent a year
earlier.
Outlook
The outlook for oil services remains uncertain and there is pressure on pricing.
Still, there are increasing signs of a recovery, particularly offshore Norway
where there is a pickup in activity and in the brownfield segment where oil
companies are focusing on optimizing output from existing fields. Industry
efficiency improvements are bringing down break-even costs on developments,
which is spurring more project sanctions.
Tendering is steady and Aker Solutions is bidding for contracts totaling about
NOK 50 billion. About two-thirds of these are in the subsea area, where the
company anticipates several key projects to be awarded in 2018, particularly in
Norway, Brazil and Asia Pacific.
Aker Solutions sees overall revenue up by close to 10 percent in 2018 from
2017, helped by the recent strong order intake. Underlying 2018 EBITDA margins
are expected to remain around current levels, supported by solid execution and
the company's improvement program.
ENDS
Media Contacts:
Bunny Nooryani, tel: +47 67 59 42 71, mob: +47 480 27 575, e-mail:
Stina Kildedal-Johannessen, tel: +47 55 22 28 00, mob: +47 934 12 301, e-mail:
Investor Contact:
Fredrik Berge, tel: +47 22 94 62 19, mob: +47 450 32 090, e-mail:
Aker Solutions is a global provider of products, systems and services to the oil
and gas industry. Its engineering, design and technology bring discoveries into
production and maximize recovery. The company employs approximately 14,000
people in about 20 countries. Go to http://akersolutions.com for more
information on our business, people and values.
This press release may include forward-looking information or statements and is
subject to our disclaimer, see http://akersolutions.com
This information is subject of the disclosure requirements pursuant to section
5-12 of the Norwegian Securities Trading Act.