Norway: Bergen Group Reports Strong Order Intake in Q1

Bergen Group keeps delivering good margins both within the offshore division and the service division, while experiencing a strong order intake in the 1st quarter of the year. Delays in the hull production at the subcontractor’s weaken the quarterly result significantly, due to provisions in the shipbuilding division.

In the 1st quarter the group had a total turnover at NOK 870 million and a negative operating profit before depreciation and impairment (EBITDA) of NOK 5 million. The offshore division and the service division, which provided 60 per cent of the turnover, generated a positive operating profit of NOK 42 million.

Increased activity

The shipbuilding division had a negative operating profit of NOK 47 million in the 1st quarter. The result is characterised by provisions connected to the delays at hull yards abroad. The loss corresponds to the group’s stock exchange reported result warning on the 4th of May. The group is not happy with the result, and actions have been taken towards the hull yard to ensure the progress for the remaining work. In addition the company is working on alternative measures that will contribute to reducing the risk of future hull projects.

“We expect that the shipbuilding division will generate positive results for the rest of the year. At the same time we have signed two new orders for NOK 1.5 billion during the first quarter. This provides us with a strong foundation for securing satisfactory returns and levels of activity next year“, CEO Terje Arnesen points out. He can see exciting tendencies of a larger market for the building of advanced offshore vessels in the next years.

The last year Bergen Group has worked strategically and purposefully on establishing a strong foundation for a long-term and profitable growth connected to the group’s offshore-related activities.

“Therefore we are very pleased with, for the fourth quarter in a row, being able to deliver a double-digit positive operating profit in the offshore division“, Arnesen says.

Strong order intake and high level of market activity

In the 1st quarter Bergen Group has had a strong order intake of more than NOK 2 billion. At the same time the company has elected to remove the shipbuilding contract with BOA offshore from its order book. The customer has still not secured funding for this contract, which has been in the order backlog since the summer of 2008.

“As long as the specific time for the outfitting work still has not been determined, we have chosen not to make the contract visible in our order book“, CEO Terje Arnesen explains. The BOA contract has a value of NOK 1.9 billion, and at the customer’s side there are still processes going on with regards to the funding of the entire or part of the contract, which includes four anchor handling vessels (AHTS).

“In total we are pleased with the order development at the start of the year. All three divisions are involved in exciting processes providing opportunities for continuing the positive order development in the quarters to come. In addition we view the market outlook for our core activities as fundamentally positive in the long term as well“, CEO Terje Arnesen of Bergen Group concludes.

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Shipbuilding Tribune Staff, May 20, 2012;