Aker Solutions Profit Falls 70%; Shares Drop to 10-Month Low

Aker Solutions ASA (AKSO), Norway’s biggest oil-platform maker, said quarterly profit plunged 70 percent after it booked one-time costs and lost a legal case against Chevron Corp. The shares dropped to a 10-month low.

Net income in the second quarter fell to 134 million kroner ($24 million), or 0.50 kroner a share, from 445 million kroner, or 1.65 kroner, a year earlier, the Oslo-based company said today in a statement. That missed the 389 million-kroner mean estimate of nine analysts surveyed by Bloomberg.

The company recorded a 57 million-kroner loss following an arbitration ruling in a dispute with Chevron over delivery of components for the Blind Faith platform in the Gulf of Mexico. “Quality costs” related to Aker’s subsea operations in Brazil amounted to 130 million kroner, according to the statement.

The shares sank 5.3 percent to 69 kroner as of 5:30 p.m. in Oslo, the lowest closing price since Sept. 17, 2010.

“The results were on the weak side, but that was due to one-offs and we need to get more information about those -- whether they may persist,” said Andreas Stubsrud, an Oslo-based analyst at Pareto Securities ASA who recommends buying the shares. “Based on Aker Solutions’ history this will be perceived quite negatively that they have these one-offs, as that’s happened in the past and then lasted a few quarters.”

Revenue Falls

Sales dropped 3.7 percent to 7.8 billion kroner, missing analyst estimates of 8.3 billion kroner, while earnings before interest, tax, depreciation and amortization fell 25 percent to 636 million kroner, against estimates of 758 million kroner.

“Problems with subcontractors” on two projects in the Middle East and Brazil contributed to the “disappointing” Ebitda results, Aker said. “The work has been moved to other subcontractors, causing extra costs, delays and liquidated damages exposure of approximately 50 million kroner in total.”

Aker Solutions’ order intake rose 20 percent to 14.3 billion kroner in the period. That extended its order backlog to 46 billion kroner by the end of the quarter from 39 billion kroner a year earlier.

To contact the reporter on this story: Marianne Stigset in Oslo at mstigset@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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