Aker Solutions Falls as SEB Sees Weak Margin Outlook: Oslo Mover

Aker Solutions ASA (AKSO), a Norwegian oil services company controlled by billionaire Kjell Inge Roekke, slid to a five-month low in Oslo as SEB AB advised investors to sell shares in the company as margin weakness persists.

Shares in the Lysaker-based company fell as much as 3.8 percent to 100.6 kroner, the lowest intraday level since Nov. 16, and were down 3.4 percent as of 12:40 p.m. for a fourth day of losses. That makes Aker Solutions today’s biggest faller on the Oslo stock exchange’s OBX index of 25-most traded stocks.

The company’s first-quarter earnings will be hurt by weaker performances from its oilfield services, umbilicals and process systems units, SEB said in an e-mailed note today. A lack of work for the Skandi Aker and Aker Wayfarer vessels will also hit earnings, the bank said.

“Our cautious stance on Aker Solutions is primarily due to uncertainty in the near-term margin trend” and the so-called category-B well intervention rig project, said SEB. The Swedish bank cut its rating on the company to sell from hold and reduced its 12-month price target to 95 kroner from 115 kroner.

With established oil fields maturing and new finds becoming more difficult to develop, Aker Solutions is betting on growing demand for the subsea services it offers. The oil services provider plans to double sales by 2017 and is seeking to boost margin on earnings before interest, tax, depreciation and amortisation to 15 percent from about 10 percent.

Aker Solutions will report an Ebitda margin of 9.1 percent in the first quarter, compared with a “disappointing” 8.9 percent in the previous quarter, according to SEB. The stock fell the most in almost four years on Feb. 15 after Aker Solutions reported that profit margins shrank in the fourth quarter.

To contact the reporter on this story: Stephen Treloar in Oslo at streloar1@bloomberg.net

To contact the editor responsible for this story: Christian Wienberg at cwienberg@bloomberg.net

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