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Aker slumps on impairment

Aker Solutions17 July 2014, News Wires – Norway’s Aker Solutions has suffered a year-on-year drop in profit, posting a net loss of Nkr807 million ($130 million) on the back of a Nkr1.6 billion impairment.

This is a drop from a profit of Nkr58 million in the second quarter of 2013, despite an increase in revenue.

Aker had already warned of the impairment and confirmed it will go ahead with the split-up of the business into two entities, Aker Solutions and Akastor.

Revenue jumped from Nkr7.5 billion in 2013 to Nkr8.1 million this year.

This was helped by a 13% jump in subsea and services sales, as well as a jump in revenue for the drilling technology unit.

The impairment was booked against the company’s oilfield services business, which is set to be part of the Akastor segment of the business after the planned split takes place.

Aker confirmed it was still very much on track for the separation to take place by the end of Setpmeber

Chairman Oyvind Eriken said the company had taken huge strides since first announcing the split in April, including lining up management for the outfits.

“Today we are also announcing the first pro forma earnings figures for these companies,” he said.

The company’s bottom line was helped along by higher utilisation and improved operations at the umbilicals plant in Norway, particularly at the Johan Sverdup development.

This somewhat offset a slump on the maintenance side of the business.

Order intake rose during the quarter to Nkr21.4 billion from Nkr6.4 billion, boosted by major subsea contract awards.

The company won a Nkr14 billion order from Total for the Kaombo development offshore Angola.

“Subsea’s order intake was at a record high in the quarter and our focus now is on delivering successfully on these projects,” he said.

Aker believes its well-positioned for the future as the deep-water and subsea segments continued to grow.

“In the new Aker Solutions, the favorable trend continues for the subsea, umbilicals and engineering businesses, while the maintenance business in Norway faces a continued challenging market over the next couple of years.

“Capital discipline is currently the most important driver for exploration and production companies and is expected to remain tight over the next one to two years after which we anticipate the next wave of projects.”


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