Kvaerner doubles 1Q profit

Kvaerner, a Norway-based engineering and construction company, has doubled its net profit for total operations in the first quarter of 2015. 

Namely, the company reported NOK 137 million net profit for total operations in 1Q 2015 compared to NOK 63 million in the first quarter of 2014.

Operating revenues rose to NOK 3 525 million in the first quarter 2015 compared to NOK 3 489 million for the first quarter 2014.

In its first quarter results report, Kvaerner says it continues to prioritise measures to reduce costs and improve competitiveness for upcoming projects.

The order intake in the first quarter totalled NOK 3 610 million, including scope of work of jointly controlled entities, compared to NOK 1 283 million in the same quarter last year.

The order backlog at the end of the quarter, including scope of work of jointly controlled entities, amounted to NOK 15 840 million. This continues the solid order backlog and visibility from the end of 2014, when the order book was NOK 16 451 million.

Jan Arve Haugan President & CEO of Kvaerner said:“The margins we deliver this quarter are not up to our ambitions, but we will use it as an inspiration for further cost improvements. Our first priority is to execute on-going projects safely and predictably. Even if there is much uncertainty with respect to how the markets will develop over the next 12 to 24 months, Kvaerner see a long term fundamental market demand for our core expertise and solutions.

He added: “We continue to drive our cost and productivity improvements in close cooperation with the oil companies, and we are positioned in segments where there will be key contract awards in 2015”

Outlook

For 2015, Kvaerner has said it expects activity levels of NOK 12-13 billion, including revenues from jointly controlled entities. The year 2015 is expected to be challenging with results on the low side of what has been delivered historically, the company added, saying this is due to continued challenging cost developments and phasing of the current project portfolio, timing of new contract awards, as well as on-going capacity reductions.

Kvaerner has said that contract awards in 2015 will have limited margin contribution in the year. All in all, this reflects that the EPC business is lumpy and fluctuations will have to be expected from quarter to quarter, the company said in its quarterly report.