Akastor Stays in Red

Oilfield services investment company, Akastor, has posted a loss of NOK 251 million ($32.4 million), compared with NOK 3.26 billion ($421 million,  NOK 3.23 billion from discontinued operations) in the corresponding period in 2014.

The Oslo-listed company remained in red following the fourth-quarter 2014 loss of NOK 502 million.

Akastor was established as a separate listed company on Oslo Stock Exchange in September 2014, following the split of Aker Solutions into two separate companies.

The company has six reporting segments: MHWirth, Frontica Business Solutions, AKOFS Offshore, KOP Surface Products, Fjords Processing and Real Estate & other holdings.

Akastor, as a group, generated revenue of NOK 4 546 million, down 9 percent in the first quarter (1Q) from approximately 5 billion, the same quarter one year earlier.

The company’s aggregated 1Q EBITDA result was NOK 177 million, down from NOK 391 million in the corresponding quarter in 2014.

Akastor had an order intake of NOK 3.1 billion in the quarter. The backlog amounted to NOK 20 billion at the end of the quarter compared with NOK 16 billion a year earlier.

Furthermore, in the first quarter of 2015, Akastor’s subsidiary MHWirth had to undertake a necessary reduction of its global work force due to the very challenging rig market, affecting both MHWirth and its customers. The reduction in workforce is estimated to be 750 people including contractors, and a restructuring cost of approximately NOK 40 million is recognized in operating expenses.

During the presentation of 1Q results, Frank O. Reite, CEO of Akastor said that the company plans additional temporary layoffs at MHWirth.

“The first quarter has been characterized by significant challenges for MHWirth, as the company is adapting to the current market situation. Overall, the remaining portfolio companies have had satisfactory performance during the quarter. The focus for Akastor going forward is to develop and strengthen each of the companies in the investment portfolio, while maintaining the flexibility to act opportunistically,” said the company in a statement.

In addition, the company reported increased borrowings from NOK 5.0 billion to NOK 6.9 billion in 1Q 2015. This is mainly explained by the new bank debt of USD 125 million related to the purchase of AKOFS Seafarer and increased borrowings under the Revolving Credit Facility by NOK 800 million.

A the end of the first quarter 2015, Akastor had 4,546 employees, down from approximately 5,000 same time last year.

AKOFS Offshore, a provider of vessel based subsea well construction and intervention services to the oil and gas industry, had revenue of NOK 168 million in the first quarter compared to NOK 394 million a year earlier. The company employs 98 people.