Aker Solutions booked Q1 2020 loss of NOK 742 million, against profit of NOK 149 million same time last year.
Lower activity levels towards the end of the quarter impacted the results, as operators postponed offshore work to mitigate the spread of the coronavirus.
Loss per share was NOK 2.73. Excluding special items, Q1 2020 EPS was NOK 0.64.
The bottom line was mainly hit by depreciation, amortization and impairment for the quarter of NOK 850 million.
Impairments of NOK 548 million are mainly related to non-cash impairments of intangible assets and other long-lived assets.
In the same period last year the company reported NOK 310 million charges.
The Norwegian services player also recognized NOK 155 million restructuring charges impacting EPS.
Revenue also fell 10 per cent to NOK 6.5 billion in the quarter from NOK 7.3 billion a year earlier.
Aker Solutions Q1 orders totaled NOK 6.6 billion, bringing the backlog to NOK 26.4 billion.
Further cost-cutting and outlook
The impact of the COVID-19 pandemic and the sharp drop in oil prices caused significant disruption to the global economy during the quarter.
“Under these extreme and unprecedented circumstances, after protecting the health and safety of our people, our focus is to safeguard the financial strength of our company,” said Luis Araujo , chief executive officer of Aker Solutions.
The company’s liquidity position at the end of the first quarter was NOK 5.8 billion (NOK 2.8 billion in cash).
Aker Solutions is cutting cost further now aiming at about NOK 1 billion annually, up from projected NOK 750 million .
The company is also cutting capex investments by 40 percent from the 2019 level, to NOK 500 million in 2020.
“ The depth and scale of the decline is still unclear, but the second quarter is likely to be one of the most uncertain and disruptive quarters our industry has been through ,” said Araujo.
Given the significant market uncertainty, the company finds it challenging to provide detailed guidance.
The company expects full-year revenues to decline about 30 percent versus the full year 2019 level.