Norway's Aker Solutions to Take $211M Writedown

Reuters

OSLO, July 11 (Reuters) – Norwegian oil services firm Aker Solutions will write down 1.3 billion crowns ($211 million) after tax from its earnings in the second quarter due to impairments in its Aker Oilfield Services division, the firm said on Friday.

The writedown comes after French oil firm Total cancelled a two-year contract with an Aker Solutions vessel off Angola on June 25, which pushed Aker Solutions shares down as much as 7 percent during trading that day.

On Friday, trading in Aker Solutions shares was suspended ahead of the announcement. They were down 0.5 percent at 1039 GMT, after trading resumed, lagging an Oslo benchmark index up 0.4 percent.

"The day Total cancelled the contract, Aker Solutions lost 1.7 billion (crowns) so, in a sense, the market had priced this in to a great extent," said Anne Ulriksen, an analyst at Nordea Markets. "Shares are down 14 percent since then."

Aker Solutions said another reason for the writedown, as well as the cancelled contract with Total, was the "generally weaker market that has created uncertainty about the value of the vessel".

The analyst said the contract cancellation put into question whether this type of activity offered to Total could be replicated with other customers.

"Total was the only customer who had committed to a long-term well intervention contract so when they cancelled it, the writing was on the wall. The business case is different," she said.

Aker Solutions will publish its second-quarter results on July 17.

(Reporting by Nerijus Adomaitis and Joachim Dagenborg; Writing by Gwladys Fouche; Editing by Mark Potter)

Copyright 2017 Thomson Reuters. Click for Restrictions.

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