Aker Reports Growth in 1Q Revenue

Aker Solutions’ revenue rose to NOK 11.2 billion in the first quarter of 2014 from NOK 10.3 billion a year earlier, driven by sales of subsea products and services, single drilling equipment and umbilical systems in the U.S. and Norway.

Revenue also increased in the process systems unit, bolstered by strong demand in Norway, the Americas and the Asia Pacific, and in OMA, which had three vessels on charter in the quarter.

“Demand for our subsea products and services remained strong and our engineering unit boosted its activity as employees were mobilized in London and Oslo to start work on the Johan Sverdrup contract awarded by Statoil in December,” said Øyvind Eriksen, executive chairman of Aker Solutions. “In contrast, the offshore maintenance and modification market slowed down in Norway and an oversupply of drilling rigs curbed new-building activity globally.”

Subsea, the biggest business area, had a record-high EBITDA margin of 11.5 percent in the quarter, up from 10.6 percent a year earlier. The engineering unit’s margin was 8.7 percent, compared with 7.2 percent a year earlier. The maintenance, modifications and operations unit’s margin narrowed to 6.2 percent from 6.6 percent, and the drilling technologies margin weakened to 9.1 percent from 10 percent. Oil companies scaled back spending on maintenance and drilling activities amid concern over rising costs and stagnant oil prices.

Aker Solutions secured new orders worth NOK 8.7 billion in the quarter, bringing the backlog to NOK 55.6 billion. Subsea had the strongest intake at NOK 3.9 billion, followed by drilling technologies, which won NOK 1.9 billion in contracts.

“Subsea also secured two major contracts with key customers after the quarter’s end, reinforcing our strong position in this fast-growing market,” Eriksen said.

Aker Solutions in April won a contract worth NOK 14 billion from Total to provide a subsea production system for the Kaombo development offshore Angola and a more than USD 300 million order from Petrobras to supply subsea manifolds for Brazil’s pre-salt fields.

The company in the first quarter booked a gain of NOK 2.8 billion from the sale of two business areas – well-intervention services and mooring and loading systems.

1 Norwegian krone = 0.168127 U.S. dollars