Aker Solutions Slow Out of the Blocks

Press Release
Monday, April 29, 2013

"The slow start to 2013 is truly disappointing," says Øyvind Eriksen, Executive Chairman of Aker Solutions ASA.

Aker Solutions decided to disclose preliminary information on its financial performance in the first three months of 2013 as the results so far considerably lag current consensus market estimates.

Aker Solutions expects to report revenue of NOK 11.1 billion and earnings before interest, tax, depreciation and amortisation (EBITDA) of NOK 868 million for the first quarter of 2013.

The earnings were impacted by increased costs at the Ekofisk Zulu platform project as work was accelerated to ensure the platform will be transported from the Egersund yard to the Ekofisk field in mid-June and start producing oil by October 2013. Extra work caused by quality issues related to cables delivered by a sub-supplier also increased the project's costs. Aker Solutions' Maintenance, Modifications and Operations (MMO) business area manages 60 percent of the project, while the company's Engineering business area manages 40 percent. The final project result will depend on bonus payments triggered by timely delivery, start-up of the platform and the final settlement with the customer.

Results were also weighed down by a loss of NOK 63 million at the Umbilicals business area. Aker Solutions in the first quarter wrote down the value of several Umbilicals projects following a thorough review of the entire portfolio. Several of the projects have, as previously reported, suffered from operational challenges in Norway. As a turnaround plan is about to be implemented, the Umbilicals business area is expected to generate a low, but positive EBITDA margin in the second quarter.
The earnings were also impacted by a loss of NOK 54 million at the Oilfield Services and Marine Assets (OMA) business area as the vessels Aker Wayfarer and Skandi Aker were idle in the first quarter. The OMA business area is expected to incur additional losses in the second quarter as Aker Wayfarer and Skandi Aker are set to remain idle until commencing operations in mid-June and mid-July, respectively. The Cat B project is, as previously communicated, in a system definition phase where Aker Solutions and the client are in a dialogue on how to proceed. The parties will spend the time required to find a solution and no news should be expected in the near future.

In addition, EBITDA margins for the business areas Drilling Technologies, Well Intervention Services and Mooring and Loading Systems were slightly lower in the first quarter than the average in recent quarters, mainly because of increased costs at some projects, some delayed contract awards and timing of progress.

Aker Solutions will present a full set of first-quarter earnings on May 8, 2013. The figures reported today are preliminary and have not been discussed or approved by the Aker Solutions Board of Directors.

"The slow start to 2013 is truly disappointing," says Øyvind Eriksen, Executive Chairman of Aker Solutions ASA. "As lost or postponed contract awards are part of the game, some of the quality issues are, simply speaking, unacceptable. We have worked hard to avoid such mistakes, but there is still a way to go. My hope is that the customers appreciate our efforts to deliver according to our commitments to safeguard their commercial interests and that we ultimately will be able to find amicable solutions to some of the additional costs."

 

Maritime Reporter September 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

U.S. Drillers Cut Rigs to Lowest since August

Energy companies have reduced the number of rigs drilling for oil in the United States to the lowest since August, shifting more rigs in favor of natural gas as crude prices dive,

Equinox Class Scrubber Systems Receive Certification

Algoma Central Corporation (“Algoma”), the largest Canadian shipowner and operator of domestic Great Lakes vessels announces that it has received all requisite

MARAD Tests Alternative Power for Ships

The Maritime Administration (MARAD) is testing state-of-the-art, environmentally efficient technology onboard the Training Ship (TS) Kennedy.   The National Defense

Offshore

U.S. Drillers Cut Rigs to Lowest since August

Energy companies have reduced the number of rigs drilling for oil in the United States to the lowest since August, shifting more rigs in favor of natural gas as crude prices dive,

Arctic Oil: Bourbon to Enter Arctic Market in 2016

Bourbon plans to enter the growing Arctic Offshore market in 2016 with a new Anchor Handling Tug Supply (AHTS) vessel built by the Vard shipyard. This AHTS (Anchor

Total CEO: EU Must Fight US Crude Export Law

First major public appearance of new Total head; he challenges European politicians to fight US ban. The new head of French energy major Total challenged Europe to fight Washington over the U.

Finance

Italy Ending Med Sea Rescues

Rights groups warn of risk of more deaths; EU mission Triton will have more limited scope. Italy said on Friday it would close a sea rescue mission that has saved the lives of more than 100,

St. Lawrence Seaway Workers Extend Strike Deadline

The union that represents workers on the St. Lawrence Seaway, the waterway that links the Great Lakes and the Atlantic Ocean, has extended a strike deadline to Monday at 5 p.

Mitsubishi Exits Cruise Business; Books $357m Loss

Mitsubishi Heavy Industries, Ltd. (MHI) announced its decision to book an extraordinary loss from its cruise ship business in the company's consolidated financial

Offshore Energy

U.S. Drillers Cut Rigs to Lowest since August

Energy companies have reduced the number of rigs drilling for oil in the United States to the lowest since August, shifting more rigs in favor of natural gas as crude prices dive,

Total CEO: EU Must Fight US Crude Export Law

First major public appearance of new Total head; he challenges European politicians to fight US ban. The new head of French energy major Total challenged Europe to fight Washington over the U.

Ensco plc Reports 3Q, 2014 Results

Ensco plc  today reported earnings per share from continuing operations of $1.93 in third quarter 2014, up 16% from $1.66 in third quarter 2013. Adjusted for a $0.

Underwater Engineering

GAC Starts Hull Cleaning Op'ns in Oman

GAC EnvironHull hull cleaning operations using the brush-and-diver-free HullWiper system starting at the port of Sohar, just outside the Gulf of Hormuz. This

First Libra Offshore Oil Well Confirms Discovery

Libra consortium reports that drilling the first well in the area extension of Libra, the 3-BRSA-1255-RJS (3-RJS-731), confirmed the discovery of good quality

Maersk Interceptor Named in Norway

In a ceremony held at GMC Marine Partners yard in Mekjarvik in Norway, Mrs. Anita Utseth, Senior Vice President in Det norske oljeselskab ASA (Det norske) had

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Security Maritime Standards Naval Architecture Pipelines Port Authority Ship Repair Ship Simulators Winch
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1781 sec (6 req/sec)