Kvaerner boosts profit in 2Q
Norwegian engineering and construction services company Kvaerner has seen a rise in its net profit but a drop in revenues and order-book during the second quarter of 2016.
Kvaerner’s net profit total operations in the second quarter of 2016 was NOK 44 million ($5.2M) compared to NOK 36 million ($4.3M) in the corresponding quarter last year.
The company’s profit before tax for the quarter amounted to NOK 28 million, versus NOK 88 million for the same period last year.
The company’s total revenue and other income for the quarter, excluding Kvaerner’s scope of work of jointly controlled entities, amounted to NOK 1 859 million, compared to NOK 3 125 million in the second quarter of 2015.
Total revenues, including jointly controlled entities (Field Development segment), in the past quarter amounted to NOK 2 475 million, compared to NOK 3 794 million in the corresponding quarter of 2015.
As of June 30, 2016, Kvaerner’s order backlog totalled NOK 10 172 million, while it was NOK 12 054 million after the first quarter of 2016. Estimated scheduling of the order backlog is approximately 47 percent for execution in 2016 with remaining 53 percent for execution in 2017 and later.
Kvaerner is debt free, and has more than NOK 2.4 billion in net cash. This reflects a net increase in cash and bank deposits during the second quarter of NOK 325 million.
Winning new contracts a priority for Kvaerner
For the second half of 2016, Kvaerner expects some few projects in relevant segments to come up for contract award. Despite fierce competition, Kvaerner said it expects awards in 2016, 2017 and 2018, both in the Norwegian market and in other targeted regions.
“Winning new contracts to secure a sound activity level also in the next years is a priority for us. The market may during the coming year start a careful development in a somewhat more positive direction. Clients demand that contractors must demonstrate both ability to deliver predictably and a sufficient economic robustness,” says Kvaerner’s President & CEO, Jan Arve Haugan.
According to Kvaerner, several oil companies have communicated that they expect a certain increase to the oil price and that this may trigger the start of new projects. However, it is difficult to estimate the timing of possible new investments and what kind of development solutions key customers may decide on, the company deduced. This continues to create uncertainty for the activity level in 2017 and onwards, Kvaerner concluded.
Offshore Energy Today Staff