Aker Solutions Declines as Profit Misses Estimates

Aker Solutions ASA slumped the most in six months in Oslo trading after Norway’s biggest maker of oil platforms and equipment reported lower sales and earnings that missed analysts’ estimates.

The shares fell as much as 7.85 kroner, or 9.6 percent, to 74.25 kroner, the biggest intraday decline since Feb. 8, and were at 76.1 kroner as of 12:26 a.m. local time.

Given “the recent events in Aker Solutions with more focus on change of CEO than order intake, investors will not be reassured after lower than expected Ebitda and operating cash flow,” DnB NOR ASA analyst Lars-Daniel Westby said in a note.

Aker Solutions, which is looking for a new chief executive officer after Simen Lieungh resigned in June, said second-quarter net income fell 44 percent to 445 million kroner ($72 million) from a year earlier, missing the 493 million-krone estimate in a Bloomberg survey. Sales fell 17 percent to 11.9 billion kroner. Earnings before interest, taxes, depreciation and amortization, or Ebitda, fell to 951 million kroner from 1.2 billion kroner. Analysts estimated Ebitda of 1.1 billion kroner.

“We agree that Aker Solutions’s potential is higher than what the second quarter results show and that is why we’re so impatient to develop the strategy and plans for the company in the years ahead,” Chairman Oeyvind Eriksen said in an interview in Oslo. “We’ll focus on the offshore oil and gas units.”

The company said today it aimed to boost its market share by developing new markets, products and services and winning more contracts by improving its cost structure. “Growth potential could be as high as 40 percent without adding significant costs,” Eriksen said.

The board yesterday agreed to separate the Process & Construction unit from the rest of the company. This could be done through a stock listing or a sale by the end of the year, Eriksen said, declining to give an estimated value for the unit.

Analyst Tormod Saetre at First Securities ASA estimated the unit to be valued at 3.8 billion kroner, in an Aug. 5 report.

Revenue fell 10 percent in the Energy & Development Services division, with the Ebitda margin slipping to 6.4 percent from 8.6 percent. Chief Financial Officer Leif Borge said in his presentation to analysts today that the margin was expected to rebound in the coming quarters.

In Energy & Development “revenue was 6 percent below expectations, but the biggest disappointment was the 6.4 percent Ebitda margin,” Frederik Lunde, a Carnegie ASA analyst with an “outperform” recommendation, said in a note. The margin was hurt by problems in completing the Gjoea platform and the Spitsbergen rig and will “return to the 7-8.6 percent range in the third quarter and coming quarters.”

Aker Solutions’ order intake was 15 billion kroner in the period, bringing the total backlog 60.3 billion kroner, the company said.

It announced a joint venture with Kazakh company KGNT Holding “to target oil and gas opportunities in Kazakhstan.” The 50-50 venture, named Aker Caspian, will offer services to offshore developments, maintenance and modification projects, and fabrication services for onshore plants in Kazakhstan, Aker Solutions said in a statement.

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