Aker Solutions ASA posts results for Q3 2017
Aker Solutions delivered strong execution on major projects globally in the third quarter of 2017 and made good progress on improvement efforts that supported margins, the company said in its press release.
The company has completed 90 percent of a program aimed at increasing cost-efficiency across the business by at least 30 percent by the end of this year. It is now also targeting an additional improvement of minimum 20 percent by the end of 2021. This compares with the company's 2015 costs and work volumes.
The company in the quarter won 13 study awards for front-end engineering, giving a record of 84 studies in the first nine months of the year. That compares with a previous high of 81 studies in 2016.
Orders totaled NOK 2.6 billion in the quarter and included a framework agreement from Shell for brownfield modifications services and maintenance support at the Nyhamna and Draugen facilities in the Norwegian Sea as well as a contract from Statoil for front end engineering and design of a module to increase gas output at the North Sea Troll field. This includes an option for engineering, procurement, construction and installation of the module. The backlog was NOK 27.2 billion at the end of the quarter, about half of which was for projects outside Norway.
Revenue fell to NOK 5.4 billion in the quarter from NOK 6 billion a year earlier amid the global market slowdown and as some projects neared completion. Earnings before interest, taxes, depreciation and amortization (EBITDA) were NOK 401 million in the quarter, compared with NOK 477 million a year earlier. The EBITDA margin was 7.4 percent versus 8 percent a year earlier. Excluding special items, the margin was 7.8 percent compared with 7.9 percent a year earlier.
Aker Solutions has two reporting segments: Projects and Services. Revenue in Projects declined to NOK 4.2 billion in the quarter from NOK 5 billion a year earlier amid generally lower market activity and on some projects nearing completion.
The EBITDA margin was 7.6 percent in the quarter versus 8 percent a year earlier. Revenue in Services rose to NOK 1.2 billion in the quarter from NOK 1 billion a year earlier, driven mainly by growth from the acquisition of C.S.E. Mecânica e Instrumentação in Brazil in December last year. The EBITDA margin expanded to 13.5 percent in the quarter from 11.3 percent a year earlier, helped by strong operational performance and high installation and commissioning activity.