Aker Solutions Q2 order backlog was NOK 35 billion
Staff Writer |
Aker Solutions delivered on major projects globally in the second quarter as operational improvements supported margins amid a slowdown for the oil and gas industry.
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The company won NOK 3.4 billion in orders in the period, including a contract of more than NOK 1 billion to deliver its longest-ever umbilicals system at the Zohr gas field offshore Egypt and an order from Idemitsu Oil and Gas for front end engineering design at the Sao Vang and Dai Nguyet developments offshore Vietnam.
In Norway, the company secured an engineering framework agreement with Lundin and MMO contracts with Statoil and Kværner. Aker Solutions saw continued interest in its front end engineering capabilities, receiving 29 study awards for projects in Norway, Australia, Asia Pacific and West Africa.
The order backlog was NOK 35 billion at the end of the quarter, of which almost two-thirds were for projects outside Norway. Finances were robust, with a liquidity buffer of 7.9 billion kroner at the end of the period. Net debt fell to NOK 1.3 billion from NOK 1.8 billion a year earlier.
There was good progress on a goal to boost cost-efficiency across the business by at least 30 percent amid a broader effort to streamline operations and strengthen competitiveness.
The plan is to achieve annual cost savings of minimum NOK 9 billion by the end of next year, based on the 2015 cost base and work volumes. The company expects a quarter of this target to be achieved this year and for improvements to accelerate next year.
Revenue fell to NOK 7 billion in the quarter from NOK 8 billion a year earlier as the oil-services market slowed and some projects neared completion. Earnings before interest and taxes (EBIT) were NOK 319 million compared with NOK 376 million a year earlier.
The EBIT margin was 4.6 percent versus 4.7 percent a year earlier. The company had NOK 77 million in special items, mainly from costs of restructuring and impairments. The margin excluding special items was 5.7 percent.
Aker Solutions has two reporting segments: Subsea and Field Design. Subsea revenue fell to NOK 4.3 billion in the quarter from NOK 4.8 billion a year earlier.
The EBIT margin narrowed to 4.6 percent from 7.1 percent, impacted by higher depreciation and lower subsea services demand. The margin excluding special items was 6 percent.
Revenue in Field Design, which consists of MMO and Engineering, dropped to NOK 2.7 billion in the quarter from NOK 3.3 billion a year earlier.
The decline was led by MMO, where some major projects neared completion and volumes contributing to revenue were small from other projects still in their start-up phase.
The EBIT margin widened to 5.5 percent in the quarter from 4.9 percent a year earlier, helped by good progress on projects. The margin excluding special items was 6.1 percent. ■