Kvaerner To Report 61 Percent Loss of 2Q Profits

Tuesday, August 21, 2001
Anglo-Norwegian engineering group Kvaerner is expected to report a 61 percent drop in second-quarter pre-tax profits due to weak market conditions in the U.S., a Reuters survey showed on Tuesday.

Six analysts forecast the company would report pre-tax profits of 56 million Norwegian crowns ($6.30 million) in the three months to June 30 from 145 million in the same period last year.

Kvaerner's operating profit for the period was seen at 179 million, down from 282 million in the second quarter of 2000. The company is scheduled to present its second-quarter results on Wednesday morning.

Kvaerner's shares hit a 15-year low of 40.6 crowns last week on the back of negative reports from some brokerages. The shares closed up 1.7 crowns at 48.5 on Tuesday, outperforming a 0.5 percent gain in the Oslo bourse Total index.

The company also faces a $65 million claim for compensation and damages from CalEnergy Minerals in California over a dispute about the construction of a plant to recover zinc from geo-thermal brine.

Kvaerner's shares have also been depressed by speculation that the cash-strapped company may launch a new share issue.

Several analysts have said Kvaerner's future depends on it linking up with its main rival Aker Maritime.

"I am confident that there will be a link-up... The question is when?" one analyst said.

The major shareholder in Aker Maritime, investor Kjell Inge Roekke, staged an unsuccessful attempt to merge Aker Maritime with Kvaerner earlier this year.

One out of the six analysts polled had an "accumulate" recommendation on Kvaerner, two recommended "hold", two said "reduce" and one said "sell". - (Reuters)

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