Brazil: Scana Signs Contract with STX for AH11 Vessels Propulsion System Delivery

Scana Industrier ASA has through its subsidiary Scana Volda AS signed contract with STX Europe for delivery of remote controlled propulsion system for two anchor handling vessels (STX AH11) which will be built in Brazil. Delivery is 4(th) quarter 2011 and 2(nd) quarter 2012.

The vessels will be operated by Norskan which represents DOF ASA in Brazil. Scana has delivered equipment to a number of vessels built by STX and Norskan in Brazil.

Scana has also signed contracts for remote controlled propulsion systems to two fishing vessels and four standby vessels. Total value of the contracts is 68 MNOK.

The new contracts are important for Scana Volda’s activity level ahead. A low number of contracts globally in 2009 have reduced Scana’s activity in the marine segment. This includes the marine companies Scana Volda, Scana Mar-El, Scana Skarpenord and Scana Zamech. Also the steel companies in Norway and Sweden have been hit by the reduced activity in the marine market segments that is important to optimize product mix in production and profitability.

The number of contracts globally in the marine segment has increased over the last months. In turn, this will increase Scana’s order intake and contribute to a better product mix in 2011 for the steel companies.

Scana maintains the information given through the report for 1(st) half 2010 and recent investor presentations whereby the weak marked combined with summer-closure at steel companies yield a negative operating result for third quarter. Increase in order intake combined with Scana’ position will improve profitability thereafter.

[mappress]

Source: Scana,October 4, 2010