Akastor Posts NOK 1.37 Bln Loss

Oilfield services investment company, Akastor, has booked a third-quarter 2015 loss as impairments hit the Group’s earnings and revenues slid on weak market.

The Oslo-listed company recorded loss of NOK 1.37 billion ($162 million) for the third quarter 2015 and loss for the first nine months of NOK 1.92 billion ($226.6 million). Earnings per share for the quarter are negative NOK 5.08.

Akastor, as a group, generated 28 percent lower revenue in the third quarter from the same quarter one year earlier, of NOK 3 678 million. The lower revenue level has resulted in capacity costs impacting the overall EBITDA for the third quarter.

Revenue in the first three quarters of 2015 was down approximately 25 percent to NOK 16 106 million.

Furthermore, Akastor reported depreciation, amortization and impairments of NOK 1 408 million for 3Q. Net financial items were NOK -198 million for the third quarter. Net financial items were impacted negatively by impairment loss of NOK 80 million related to the shares in Ezra.

The business environment affecting Akastor’s portfolio companies remains challenging and is expected to weaken further over the coming quarters. We are intensely focused on adjusting each portfolio company’s cost base, while preserving organizational capabilities and delivering increased value to customers. Our specialized businesses will be ready for market activity growth when that time comes.

The market situation for the oil services industry deteriorated further during the third quarter, contributing towards mixed performance across Akastor’s portfolio of companies. The company has six reporting segments: MHWirth, Frontica Business Solutions, AKOFS Offshore, KOP Surface Products, Fjords Processing and Real Estate & other holdings.

“MHWirth has been most acutely impacted by the current weak market as reflected in its low order intake and reduced earnings recently. The majority of the other portfolio companies have experienced satisfactory operational and financial performance during the quarter,” the company noted in Q3 financial report.

Akastor booked NOK 142 million restructuring costs in MHWirth.

In addition, revenue in AKOFS Offshore was NOK 229 million in the third quarter compared to NOK 279 million a year earlier. AKOFS Offshore had two vessels in operations, Skandi Santos and Aker Wayfarer, while AKOFS Seafarer was idle during the quarter.

AKOFS Offshore backlog at the end of the quarter was NOK 6 395 million.

AKOFS Seafarer

According to Akastor, the market outlook is expected to be challenging going forward and a decision was made in the quarter to further reduce cost by adjusting operational preparedness. Following these cost reductions, operating expenses for the vessel whilst lying idle are expected to be less than USD 10 000 per day with full effect expected to materialize during the latter part of 4Q 2015.

In the third quarter, an impairment loss of NOK 1 037 million related to AKOFS Seafarer was recognized.

“The vessel is being, and will continue to be, actively marketed for work in the subsea construction and service market as well as Light Well Intervention (LWI), however the impairment was triggered by the current weak market conditions which are expected to continue in the short to medium term,” the company explained.