Aker Solutions profit jumps amid signs of market rebound

Norwegian oil services company Aker Solutions saw an increase in its quarterly profit and revenues driven by growth in North Sea work as its orders nearly doubled amid signs of a market rebound. 

Aker Solutions on Friday said that its net income jumped to NOK 105 million in the first quarter of this year from NOK 62 million in the same period last year.

Furthermore, the company’s revenues rose to NOK 5.5 billion in the quarter from NOK 5.2 billion a year earlier, driven by increased North Sea modifications work and good progress on international projects.

The company’s orders almost doubled from a year earlier amid increasing signs of a market recovery. Orders totaled NOK 8.6 billion in the quarter, bringing the backlog to NOK 37.6 billion.

Most were for projects in Norway, including a contract to deliver modules for the floating production, storage and offloading vessel for Johan Castberg, the largest oil discovery in the Barents Sea. The company also won contracts to deliver subsea production systems for the Troll Phase 3, Askeladd and Nova fields offshore Norway. It also secured a maintenance and modifications services contract from Petrobras in Brazil.

“We are seeing increasing signs of a market rebound as lower break-even costs and higher oil prices spur project sanctions, particularly in Norway,” said Aker Solutions Chief Executive Officer Luis Araujo.

According to the company, the outlook for oil services remains uncertain and there is pressure on pricing. Still, there are increasing signs of a recovery, particularly offshore Norway where there is a pickup in activity and in the brownfield segment where oil companies are focusing on optimizing output from existing fields. Industry efficiency improvements are bringing down break-even costs on developments, which is spurring more project sanctions, the oil services company explained.

Tendering is steady and Aker Solutions is bidding for contracts totaling about NOK 50 billion. About two-thirds of these are in the subsea area, where the company anticipates several key projects to be awarded in 2018, particularly in Norway, Brazil and Asia Pacific.

Aker Solutions sees overall revenue up by close to 10 percent in 2018 from 2017, helped by the recent strong order intake.

Offshore Energy Today Staff

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