Aker Solutions to Divide Company in Two

Posted by George Backwell May 1, 2014

Aker Solutions release Q1 2014 financial results and separately inform they will split into two companies to speed up a streamlining process that will reduce costs and better position all parts of the group to meet the needs of customers in an increasingly competitive global energy industry.

Financial Highlights

Sales rose to NOK 11.2 billion in the first quarter of 2014 from NOK 10.3 billion in the first quarter of 2013.
Earnings before interest, tax, depreciation and amortization (EBITDA) gained to NOK 1.05 billion in the quarter from NOK 767 million in the year-earlier period when earnings were impacted by losses in the umbilicals and OMA business areas and increased costs at the Ekofisk Zulu project.
The EBITDA margin improved to 9.3 percent in the quarter from 7.4 percent a year earlier.
Earnings per share (EPS) were NOK 1.12 in the quarter, compared with NOK 1 a year earlier.
The order intake was NOK 8.7 billion in the quarter, compared with NOK 25 billion a year earlier.
The order backlog was NOK 55.6 billion at the end of the quarter. The year-earlier backlog was NOK 68.7 billion and included a Category B rig contract worth NOK 11 billion that was canceled in June 2013.

Dividing the company
Aker explain that the Subsea, Umbilicals, Engineering and Maintenance, Modifications and Operations (MMO) areas will form a new company under the Aker Solutions name. The company will be more strategically aligned, have a narrower focus and deeper synergies to strengthen its leading position through its unique subsea technology and state-of-the-art offshore field design.

The other units, including Drilling Technologies, Aker Oilfield Services and Process Systems, will be developed independently as part of a new oil-services investment company, named Akastor. These business areas, which have significant operational, technological and commercial differences, will have greater strategic freedom to develop individually through both organic growth and transactions.

The split, which will take place as a spin-off of the new Aker Solutions, is scheduled to occur around the end of September. Both companies will be listed on the Oslo stock exchange.