The Oslo-based company rose as much as 11 percent to 109 kroner a share, trading 9.6 higher as of 10:59 a.m. It was the biggest gain since Nov. 27. Almost 1 1/2 times the three-month daily average had changed hands.
While fourth-quarter sales of 11.4 billion kroner ($1.9 billion) trailed the 11.6 billion-kroner median estimate of 20 analysts surveyed by Bloomberg, orders reached a record 12.9 billion kroner. That pushed the company’s backlog to 58.1 billion kroner, even as oil companies scale back spending.
“We’re not insensitive to a lower activity level,” Executive Chairman Oeyvind Eriksen said in an interview in Oslo. “But we believe the combination of record-high orders and activities within some of the most attractive oil-service segments, even after revised investment estimates, will make Aker Solutions well positioned to get through, and profit from, a period with somewhat lower activity.”
Statoil ASA, Norway’s biggest energy company and Aker Solutions’ largest client, last week followed other oil companies in scaling back spending. Still, Statoil awarded Aker Solutions a 3 billion-krone modifications contract in the fourth quarter, in addition to a framework contract running as long as 10 years for engineering at the Johan Sverdrup field, the biggest find offshore Norway in decades. That contract is Aker Solutions’ largest engineering contract ever, Eriksen said.
“So far, demand has been robust for most of Aker Solutions’ products and services,” he said in a presentation. “The order backlog gives us confidence in the medium term” and contracts such as the Sverdrup agreement and a deal with Petroleo Brasileiro SA “provide support for the long term.”
Aker Solutions’ order intake and outlook “should silence the skeptics,” RS Platou Markets analyst Turner Holm said in a note to clients today.
“We are highly encouraged by the strong bookings,” he said. “The company cites continued high tender activity for Subsea and continued opportunities from the high amount of rigs and floating production systems to be delivered in the next 18 months.”
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