Aker Solutions ASA : Aker Solutions ASA: Slow start to 2013 - strengthened
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
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
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
*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
For further information, please contact:
Lasse Torkildsen, SVP Investor Relations, Aker Solutions. Tel: +47 67 51 30
39, Mob: +47 91 13 71 94, E-mail: firstname.lastname@example.org
Bunny Nooryani, Chief Communications Officer, Aker Solutions. Tel: +47 67 59
42 71, Mob: +47 480 27 575, E-mail: email@example.com
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
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
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(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
information contained therein.
Source: Aker Solutions ASA via Thomson Reuters ONE
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