Aker Solutions Sees Revenue Slashed by NOK 800 Mln

Aker Solutions has delivered lower third-quarter profit as its revenue dropped some NOK 800 million from the prior-year quarter on subsea services activity decline in the North Sea market.

Norwegian oil services company generated net income of NOK 205 million ($23.8 million), or NOK 0.75 per share, on revenue of NOK 7.5 billion, versus net income of NOK 270 million ($31.3 million), or NOK 0.97 per share on revenue of NOK 8.3 billion in the year-ago quarter.

In addition, revenue in the first nine months of 2015 rose to NOK 24 billion from NOK 23.8 billion a year earlier. EBIT was NOK 1.1 billion compared with NOK 1.5 billion a year earlier. The EBIT margin in the first nine months narrowed to 4.6 percent from 6.1 percent a year earlier.

Subsea revenue fell 12 per cent in the quarter to NOK 4.5 billion from NOK 5.1 billion a year earlier.

The company reported NOK 40 million in restructuring costs and NOK 40 million in onerous lease costs on vacated office space in Norway, the UK and Asia. Unrealized loss of NOK 25 million on non-qualifying hedges and NOK 4 million in IT system separation costs related to the 2014 company demerger was also booked in the third quarter, as well as NOK 11 million in impairment charges on technology and property.

The company bagged NOK 4 billion in orders for the third quarter, an increase from NOK 3.6 billion a year earlier. Subsea order intake rose to NOK 2.5 billion from 1.8 billion same time last year.

The order backlog stood at NOK 40.7 billion at the third-quarter end, down from NOK 49 billion in the corresponding period in 2014.

The subsea order backlog fell to NOK 25.5 billion at the end of the quarter from NOK 35 billion year-on-year.

Workforce Reduction

The company in the quarter announced plans to further reduce its workforce to position itself to current market situation. More than 10 per cent of the global workforce has been slashed, the majority in Subsea, followed by MMO and Engineering. Aker Solutions said it will remain vigilant about capacity in all parts of its business while seeking to protect core competencies.