Aker Solutions Slumps as Cost Overruns Sap Earnings: Oslo Mover
Aker Solutions ASA (AKSO), the oil services group controlled by billionaire Kjell Inge Roekke, fell the most in 4 1/2 years in Oslo after warning first quarter profit will trail estimates by more than 20 percent.
The Oslo-based company slumped as much as 22 percent, the most since Oct. 24, 2008, and traded 21 percent lower at 83.9 kroner as of 9:05 a.m. local time. More than 1.22 million shares have been traded so far, more than the average daily volume during the last three months.
Aker Solutions expects to report earnings before interest, tax, depreciation and amortisation of 868 million kroner ($148.8 million) and revenue of 11.1 billion kroner, it said today. The company was expected to report Ebitda of 1.13 billion kroner, according to the average of 13 analyst estimates. Revenue was seen at 11.5 billion, the average of 15 estimates shows.
Earnings were hit by increased costs for the Ekofisk Zulu platform project and losses at the umbilicals and oilfield services and marine assets divisions, Aker Solutions said.
“The slow start to 2013 is truly disappointing,” Executive Chairman Oeyvind Eriksen said in the statement. “As lost or postponed contract awards are part of the game, some of the quality issues are, simply speaking, unacceptable.”
“There’s a wide-spread disappointment on execution issues in several divisions, including Maintenance, Modifications and Operations and Umbilicals,” ABG Sundal Collier Holdings analyst Haakon Amundsen said by phone from Oslo. “Some of the problems slide into the second quarter, so estimates for the full-year will come down quite significantly, certainly more than 10 percent.”
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