Aker Solutions Drops as Weaker Margins Offset Orders: Oslo Mover

Aker Solutions ASA (AKSO), the oil services group controlled by billionaire Kjell Inge Roekke, dropped the most in two months in Oslo as stronger than expected orders in the second quarter failed to offset concerns about weak margins.

Shares in the company, based in Oslo, lost as much as 4 percent, the most since June 27, and traded 1.2 percent lower at 88.5 kroner as of 10:35 a.m. About 680,000 shares have been traded so far today, almost 80 percent of the average daily volume during the last three months.

Aker Solutions is starting to see oil and gas companies delaying projects, the company said in a statement today. “Concern about constraints on oil-company cash flow has increased uncertainty about future investments,” Executive Chairman Oeyvind Eriksen said in a presentation in Oslo.

Aker Solutions is betting on growing demand for subsea services with established oil fields maturing and new finds becoming more difficult to develop. The shares fell the most in 4 1/2 years in April after it warned first quarter profit would miss estimates on higher costs at the Ekofisk Zulu platform, losses at the umbilicals and oilfield services and marine assets divisions, and lower margins at several other units.

The company today reported second-quarter earnings before interest, tax, depreciation and amortisation of 946 million kroner ($156.6 million), down from 1.4 billion kroner a year earlier and missing the 1 billion kroner average of 16 analyst estimates compiled by Bloomberg.

Weaker Margins

The company also reported an Ebitda margin of 7.9 percent, missing RS Platou AS’s own forecast of 8.7 percent “on weaker than expected margins in engineering solutions and a negative contribution from corporate items,” analyst Goeran Andreassen said in an e-mailed note.

Order intake of 10.9 billion kroner beat Platou’s 9.9 billion-krone estimate, said the analyst, which has a buy recommendation on the stock.

“Uncertainty has undeniably increased,” Eriksen said. “But in our direct dialogue with customers, the signal is still a high activity level within our core segments. We maintain an optimistic view on our regions and segments,” he said in an interview in Oslo. Margins are expected to improve during the second half, Eriksen said.

To contact the reporters on this story: Mikael Holter in Oslo at mholter2@bloomberg.net; Stephen Treloar in Oslo on at streloar1@bloomberg.net

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

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