Aker Solutions 2Q net profit down 82%
Norwegian oil services company Aker Solutions ASA said Tuesday that second-quarter net profit fell 82.3% on year, beating expectations, as some quality issues were solved. But the engineering segment was hit by fewer orders, it said, noting that oil companies' project delays increased uncertainty, said in the company's press release.
MAIN FACTS:
--The firm beat expectations with a net profit of 119 million Norwegian kroner, or NOK0.44 per share, for the April to June quarter, down from a profit of NOK674 million in the second quarter of 2012.
--The average forecast in a Factset survey of 14 analysts was for a first-quarter net profit of NOK115 million.
--2Q earnings were hit by low capacity utilization in the engineering business amid fewer orders, a loss in the umbilicals segment, and the Aker Wayfarer and Skandi Aker vessels being idle.
--The company didn't use the full capacity of its new U.S. and U.K. engineering hubs in the quarter after losing several large contract bids in 2012 and early 2013 and laid off some non-permanent staff in London and Houston but not in Norway, where activity was robust.
--Second-quarter revenue was NOK11.91 billion, up slightly from NOK11.89 billion a year earlier and higher than an expected NOK10.96 billion.
--Ebit came in at NOK222 million in the second quarter compared with NOK1.05 billion a year earlier and below an expected NOK623 million.
--The company recognized a NOK361 million investment impairment in the second quarter from the cancellation of a Category B rig project which had been intended for Statoil.
--"Aker Solutions in the second quarter resolved execution problems that led to weak results at the start of the year," said executive chairman Oyvind Eriksen. "We delivered on key projects, including the Ekofisk Zulu platform and seven umbilical systems and reduced the risks in our portfolio."
--Second-quarter order intake was NOK10.9 billion, while the order backlog was NOK59.8 billion at the end of the quarter, up 10.5% on year but lower than in the previous quarter due to the cancellation of the Cat B contract.
--Demand for Aker Solutions services is robust in most markets and tendering activity is high, but oil companies have delayed projects, causing uncertainty among oil service providers about the timing of contracts.