Aker Solutions Holds Its Own in Q4 2013

MarineLink.com
Thursday, February 13, 2014
Image courtesy of Aker

Financial Highlights in the fourth quarter of year 2013 were as follows:

  • Sales were NOK 11.4 billion in the fourth quarter of 2013, up from NOK 11.2 in the fourth quarter of 2012.
  • Earnings before interest, tax, depreciation and amortisation (EBITDA) amounted to NOK 1.06 billion in the quarter, compared with NOK 1.09 billion in the year-earlier period. The prior-year figure includes a gain of NOK 160 million from the sale of real estate.
  • The EBITDA margin was 9.3 percent in the quarter versus 9.7 percent a year earlier. The prior-year margin was 8.4 percent excluding the sales gain.
  • Earnings per share (EPS) were NOK 1.73 in the quarter, compared with NOK 1.86 a year earlier.
  • The order intake was NOK 12.9 billion in the quarter, increasing from NOK 7.7 billion a year earlier.
  • The order backlog was NOK 58.1 billion at the end of the quarter. The year-earlier backlog was NOK 53.4 billion and included a rig contract worth NOK 11 billion that was canceled in June 2013.
  • The fourth-quarter and full-year 2013 earnings exclude contributions from the mooring and loading systems and well-intervention services business areas, which were divested in January 2014.

Key Developments
Aker Solutions delivered its best quarter of 2013 as an increased focus on execution, delivery of key projects and major contract wins boosted earnings.

The EBITDA margin widened to 9.3 percent in the fourth quarter from 7.8 percent in the preceding nine months. A record NOK 57.9 billion in new orders were secured in the year, including awards from Statoil of the first-phase engineering contract for the giant Johan Sverdrup development and a NOK 3 billion contract extension for maintenance and modifications services in Norway.

"We achieved an improvement in earnings throughout last year, but that doesn't tell the full story," said Øyvind Eriksen, executive chairman of Aker Solutions. "Our subsea business became a market winner in the fastest-growing offshore segment and our engineering unit managed to turn a slow start to the year into an opportunity to cement its position over the next decade."

Subsea, the biggest business area, delivered a record profit margin of 11.4 percent in the quarter, and during the year more than doubled its order backlog to NOK 21.6 billion. The drilling technologies unit achieved its highest quarterly margin of the year, at 10.4 percent, while revenue rose.

The engineering business also had its strongest margin in 2013, at 8.4 percent in the fourth quarter, as capacity costs were reduced at its new hubs in London and Houston. Earnings in the maintenance, modifications and operations (MMO) area were impacted by increased costs at some projects and lower activity levels in Norway as oil companies reduced spending, leading to a margin of 6.8 percent in the quarter.

The four largest business areas - subsea, drilling technologies, engineering and MMO - accounted for about 90 percent of both sales and EBITDA in the quarter.

Aker Solutions in the quarter continued to streamline its business to focus on the fastest growing and most promising areas. The company announced the sale of two business areas, well-intervention services and mooring and loading systems, for a total enterprise value of NOK 5.4 billion.

"The proceeds from these divestments have enhanced our financial strength and flexibility significantly," said Eriksen. "This will enable us to take advantage of the opportunities created by more volatile markets as we continue to develop and grow Aker Solutions."

The company's board proposes paying 4.1 kroner a share in a cash dividend to shareholders, compared with 4 kroner a share the prior year.

Outlook
Demand has been healthy for most of our products and services and the high order backlog gives us confidence in a robust medium-term outlook. Key wins in Brazil and Norway, including the contract at Johan Sverdrup, also bolster the longer term outlook for the company.

There is continued high tender activity in key markets, with major projects coming up for subsea systems. Demand for maintenance and modifications at offshore facilities is easing in Norway as oil companies reduce spending.

Several offshore drilling rigs and floating productions systems are expected to be ordered over the next 12 to 18 months, creating significant opportunities.
 

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

People & Company News

UN Throws the Book at North Korea Ship Operator

A U.N. Security Council committee on Monday blacklisted the operator of a North Korean ship, which was seized near the Panama Canal last year for smuggling Soviet-era arms,

Gondan to Build Spanish Patrol Boats

Gondan Shipyard has recently signed a contract with the Guardia Civil, Spain’s Civil Guard, for the building of two patrol boats. The aluminum and fiber (PRFV ) vessels will measure 20.

ABS to Class the World's First CNG Ship

ABS announced it has been chosen to class the world's first compressed natural gas (CNG) carrier ordered by Pelayaran Bahtera Adhiguna, a subsidiary of Indonesia's

Offshore

FLNG Prelude: A New Dawn in the Age of Maritime & Energy

Longer than four football fields, as big as six Nimitz-class aircraft carriers and almost as tall as the Taipei 101 skyscraper, Royal Dutch Shell PLC is hoping that its record-setting,

Corvus Energy, GMC Close Financing Agreement

Corvus Energy today announced that it has completed a strategic investment by Green Marine Capital (GMC) previously announced on May 5, 2014. Green Marine Capital,

Valemon Topsides Installed

On Monday, July 28, the topsides were lifted into place on the steel jacket on the Valemon field in the North Sea. Produced by Samsung Heavy Industries this is

Finance

Corvus Energy, GMC Close Financing Agreement

Corvus Energy today announced that it has completed a strategic investment by Green Marine Capital (GMC) previously announced on May 5, 2014. Green Marine Capital,

Cummins Reports Revenue Jump in Q2 2014

Cummins Inc. reported its results for the second quarter of 2014. According to the report, second quarter revenue of $4.8 billion increased 7 percent from the same quarter in 2013.

GPA Sets Tonnage Record

The Georgia Ports Authority moved more than 29 million tons of cargo, 3 million twenty-foot equivalent container units (TEUs) and more than 700,000 auto and machinery units in Fiscal Year 2014.

Offshore Energy

Prelude By the Numbers

Out at sea, look! It’s a ship! It’s a floating rig! It’s SuperFLNG! While not “faster than a speeding bullet,” Shell’s shipzilla Prelude is certainly more powerful than a speeding locomotive,

FLNG Prelude: A New Dawn in the Age of Maritime & Energy

Longer than four football fields, as big as six Nimitz-class aircraft carriers and almost as tall as the Taipei 101 skyscraper, Royal Dutch Shell PLC is hoping that its record-setting,

Corvus Energy, GMC Close Financing Agreement

Corvus Energy today announced that it has completed a strategic investment by Green Marine Capital (GMC) previously announced on May 5, 2014. Green Marine Capital,

Underwater Engineering

North Sea Atlantic Joins the Technip fleet

On Saturday July 26, 2014, a ceremony was held in Bergen to officially name the latest new subsea construction vessel to join the Technip fleet, the North Sea Atlantic.

Search for Flight MH370: Update

Australia's Joint Agency Coordination Centre (JACC) says that a bathymetric survey of the 60,000km2 search area is well underway, with two vessels, the Australian-contracted

Rosneft Starts Up Field Work in the Kara Sea

On July 24 this year, research vessel Geolog Dmitry Nalivkin sailed from Kirkenes (Norway) to the Kara Sea. In the next three months 2D seismic survey, will

 
 
Maritime Standards Naval Architecture Navigation Offshore Oil Pipelines Pod Propulsion Salvage Shipbuilding / Vessel Construction Sonar 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: 0.1586 sec (6 req/sec)