Aker — Earnings Release 2020

May 8, 2020

Aker ASA: First quarter results 2020

Aker ASA: First quarter results 2020

The fight against COVID-19 by closing borders and business comes at a cost. Oil

consumption dropped significantly, and the oil price decreased 65.5 per cent in

the first quarter. Consequently, the Net Asset Value ("NAV") of Aker ASA

("Aker") decreased by 52 per cent to NOK 24.1 billion (NOK 325 per share).

Aker's liquidity reserve, including cash deposits and undrawn credit facilities,

stood at NOK 6.1 at the end of the first quarter. During the second quarter, it

increased to NOK 7.2 billion.

The Aker share decreased 57 per cent in the first quarter, compared to a 65.5

per cent drop in oil price and a 24 per cent decrease in the Oslo Stock

Exchange's benchmark index ("OSEBX"). So far in Q2, our NAV is up 24 per cent to

NOK 30 billion and the Aker share is up 20 per cent to NOK 283.

"A microscopic enemy has had significant adverse effects on global economy, and

especially the oil market, unlike anything we can remember. Plunging oil demand

coupled with supply increases, created a perfect storm. Aker is exposed to

industries that have been hit especially hard, but we have managed through

challenging times before. We have learned from past experiences the importance

of a strong balance sheet and liquidity position to not just weather the storm,

but also to pursue opportunities and regain shareholder value. That is why we

have increased our liquidity reserve to NOK 7.2 billion," said Aker's President

and CEO, Øyvind Eriksen.

While the ultimate impact of the pandemic and market situation is still unknown,

Aker is bracing itself for long-term effects of the crisis. The oil service

industry has been hit especially hard. Projects in progress are slowing down due

to lockdown of countries and businesses, and oil companies are canceling or

postponing a large proportion of new projects and other activities. Some

temporary changes to the Norwegian petroleum tax regime have been proposed by

the industry itself (NOROG) to stimulate activity and avoid significant and

permanent reductions in capacity and competency for the supplier industry,

safeguard tax revenues, and avoid large social expenditures for the country.

The counter proposal by the Government last week does not have the intended

effects on activity, employment, and tax revenue. The practical and anticipated

differences between the NOROG proposal and Government proposal for Aker

Solutions, Kvaerner and MHWirth, measured by activity and employment, are

outlined in the document attached hereto. The short version is that the

Government proposal will most likely have no effect on activity in Kvaerner and

only marginal positive effects on activity for parts of Aker Solutions. The

analysis explains how serious the current situation is both for the oil services

industry and for a large number of local municipalities hosting the industry.

The material constitutes the basis for some hard decisions that we have to make

in the time ahead.

"The value of our oil service activities only accounts for 4 per cent of our

gross assets, but measured by employment, competency and technology, Aker

Solutions, Kvaerner and MHWirth are punching above their weight. These are

companies with employees and capabilities of vital importance both for future

oil and gas activities and for the transition to 'green solutions' like offshore

wind, carbon capture and storage, and electrification. Without efficient

governmental initiatives to stimulate new activity, a significant part of the

capacity and competency in the oil service industry in Norway is likely to be

dramatically reduced. Hence, the proposal from NOROG is of utmost importance,

not only to Aker, but also to the future of industry in Norway and our country

at large," said Eriksen.

"I'm grateful for how the industry has come together in this time of crisis and

stands united behind a proposal which will facilitate a base activity needed to

maintain capacity and competency. I sincerely hope that our elected officials

will also be able to put ideological differences aside and support an industry

which has been impacted brutally by the current lockdown. In reality, there are

no alternative projects for thousands of highly skilled white- and blue-collar

workers unless activity is stimulated as suggested. The resources and

capabilities of the oil and gas industry have been instrumental in building

Norway as the unique society we are all enjoying. The industry acknowledges the

need for changes, but it will still be of vital importance for existing and new

industrial activities," Eriksen adds.

"In times like this, it's important to keep in mind that Aker is about more than

oil and gas. Through fast-growing portfolio companies, we are a part of global

trend lines that have amplified and accelerated during the COVID-19 pandemic.

The shift to 'green industries' and renewable energy is expected to maintain

momentum as focus is shifting to governmental initiatives designed to stimulate

new activity and to transform national economies. New software solutions and

automatization are not just making it possible to work from home, but are also

making industries more efficient and less exposed to human risk factors like

COVID-19. The focus on health and healthy living also continues to accelerate.

All these global trend lines fit well with our strategies to build offshore wind

and carbon capture capabilities in Aker Solutions and Kvaerner and to further

strengthening the successes of Cognite and Aker BioMarine in the industrial

software and Marine biotech industry segments, respectively," said Eriksen.

-ENDS-

For further information, please contact:

Investors:

Torbjørn Kjus, Chief Economist & Head of Investor Relations

Phone: +47 94 14 77 30

Media:

Atle Kigen, Head of Corporate Communications

Phone: +47 90 78 48 78

This information is subject of the disclosure requirements pursuant to section 5

-12 of the Norwegian Securities Trading Act.