Aker Solutions ASA : Aker Solutions ASA: Slow start to 2013 - strengthened management 29 April 2013 - Aker Solutions has decided to disclose preliminary information on its performance in the first three months of 2013 as the results considerably lag current consensus market estimates. Aker Solutions expects to report revenue of NOK 11.1 billion and earnings before interest, tax, depreciation and amortisation (EBITDA) of NOK 868 million for the first quarter of 2013. The earnings were impacted by increased costs at the Ekofisk Zulu platform project as work was accelerated to ensure the platform will be transported from the Egersund yard to the Ekofisk field in mid-June and start producing oil by October 2013. Extra work caused by quality issues related to cables delivered by a sub-supplier also increased the project's costs.Aker Solutions' Maintenance, Modifications and Operations (MMO) business area manages 60 percent of the project, while the company's Engineering business area manages 40 percent. The final project result will depend on bonus payments triggered by timely delivery, start-up of the platform and the final settlement with the customer. Results were also weighed down by a loss of NOK 63 million at the Umbilicals business area. Aker Solutions in the first quarter wrote down the value of several Umbilicals projects following a thorough review of the entire portfolio. Several of the projects have, as previously reported, suffered from operational challenges in Norway. As a turnaround plan is about to be implemented, the Umbilicals business area is expected to generate a low, but positive EBITDA margin in the second quarter. The earnings were also impacted by a loss of NOK 54 million at the Oilfield Services and Marine Assets (OMA) business area as the vessels Aker Wayfarer and Skandi Aker were idle in the first quarter. The OMA business area is expected to incur additional losses in the second quarter as Aker Wayfarer and Skandi Aker are set to remain idle until commencing operations in mid-June and mid-July, respectively. The Cat B project is, as previously communicated, in a system definition phase where Aker Solutions and the client are in a dialogue on how to proceed. The parties will spend the time required to find a solution and no news should be expected in the near future. In addition, EBITDA margins for the business areas Drilling Technologies, Well Intervention Services and Mooring and Loading Systems were slightly lower in the first quarter than the average in recent quarters, mainly because of increased costs at some projects, some delayed contract awards and timing of progress. Aker Solutions will present a full set of first-quarter earnings on May 8, 2013. The figures reported today are preliminary and have not been discussed or approved by the Aker Solutions Board of Directors. "The slow start to 2013 is truly disappointing," says Øyvind Eriksen, Executive Chairman of Aker Solutions ASA. "As lost or postponed contract awards are part of the game, some of the quality issues are, simply speaking, unacceptable. We have worked hard to avoid such mistakes, but there is still a way to go. My hope is that the customers appreciate our efforts to deliver according to our commitments to safeguard their commercial interests and that we ultimately will be able to find amicable solutions to some of the additional costs." 2013 outlook The slow start to 2013 reflects both increased market uncertainty and portfolio sensitivities. While Aker Solutions still experiences a high level of tender activity, the order intake in the next quarters is more at risk than in previous quarters because of recent postponements or cancelations of some projects. We expect greater clarity in the next three months on how significant portfolio sensitivities, such as Ekofisk Zulu and Skandi Aker, will develop. Provided that these projects are completed as planned and that the various business areas have a normal capacity utilisation, Aker Solutions expects the financial performance, excluding one-off items, to be better in the third and fourth quarters of 2013 than in the corresponding quarters a year ago and in line with the company's five-year plan. "Notwithstanding the recent setbacks, we are committed to developing and growing Aker Solutions in line with our five-year plan," says Øyvind Eriksen. Strengthened management team Aker Solutions recently made the following changes to its executive management team to further strengthen the company's operational management: *Nicoletta Giadrossi joined Aker Solutions as Head of Operations *Per Harald Kongelf was appointed Regional President Norway *Roy A. Dyrseth was appointed Head of Drilling Technologies *Tom Munkejord was appointed Head of Umbilicals *Rolf Leknes was appointed Head of Well Intervention Services *Bunny Nooryani was appointed Head of Group Communications The Aker Solutions operational leadership was also strengthened in a number of other positions, including: *Øyvind Christian Rohn, coming from Odfjell, was appointed Head of Drilling Riser business unit *Rune Fanetoft, coming from FMC Technologies, was appointed Head of Process Systems Norway *Einar Wahlstrøm, coming from REC, was appointed Head of Umbilicals Norway "The offshore oil and gas competency, capacity and experience represented by the Aker Solutions team are probably our main competitive advantages," says Øyvind Eriksen. "The recent recruitments and changes strengthen our operational leadership capabilities further and broaden the team's overall international experience. That's important in order to improve performance and achieve our strategic objectives." Aker Solutions will hold a conference call for analysts, investors and media at 5 p.m. CET today. Dial-in details will be published on our website www.akersolutions.com ENDS For further information, please contact: Investor relations: Lasse Torkildsen, SVP Investor Relations, Aker Solutions. Tel: +47 67 51 30 39, Mob: +47 91 13 71 94, E-mail: email@example.com Media: Bunny Nooryani, Chief Communications Officer, Aker Solutions. Tel: +47 67 59 42 71, Mob: +47 480 27 575, E-mail: firstname.lastname@example.org Aker Solutions provides oilfield products, systems and services for customers in the oil and gas industry world-wide. The company's knowledge and technologies span from reservoir to production and through the life of a field. Aker Solutions brings together engineering and technologies for oil and gas drilling, field development and production. The company employs approximately 28 000 people in more than 30 countries. We apply the knowledge and create and use technologies that deliver our customers' solutions. Aker Solutions ASA is the parent company in the group, which consists of a number of separate legal entities. Aker Solutions is used as the common brand and trademark for most of these entities. In 2012 Aker Solutions had aggregated annual revenues of approximately NOK 45 billion. The company is listed on the Oslo Stock Exchange. This press release may include forward-looking information or statements and is subject to our disclaimer, see www.akersolutions.com. This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act. Bios of new senior management members ------------------------------------------------------------------------------ This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein. Source: Aker Solutions ASA via Thomson Reuters ONE HUG#1697171
Aker Solutions ASA : Aker Solutions ASA: Slow start to 2013 - strengthened management
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