A letter of intent to sell the Pulping and Power businesses to Metso was signed in the first quarter. As it is likely that the final agreement will be signed, and according to International Financial Reporting Standards the Pulping and Power segment is treated as "discontinued operations" in the accounts from 1 January 2006. As Aker Kvaerner will operate the businesses until final closing of the transaction, pro forma accounts showing pulping and power as an integrated part of the group has been prepared as well. All comments in this report refer to the pro forma accounts unless explicitly stated differently.
First quarter revenues totaled NOK 11 588 million, an increase of 38 percent, compared with NOK 8 407 in the same quarter last year, reflecting strong markets and high activity in all reporting segments.
EBITDA for the first quarter was NOK 710 million, positively impacted by a one-time sales gain of NOK 87 million from the sale of Aker Kvaerner Power and Automation Systems. This represents an increase by 89 percent from NOK 376 million in the first quarter 2005. The quarterly EBITDA margin was 6.1 percent compared to 4.5 percent in the first quarter last year.
Order intake in the first quarter was NOK 13.9 billion due to growth in existing contracts and a steady stream of mid-sized and smaller orders. This brings the order backlog to a solid NOK 55.6 billion by the end of March 2006.
Cashflow from operating activities was NOK 447 million in the first quarter, reflecting a low NOK 211 million increase in net current operating assets, mainly due to a positive trend in advances from new contracts. Cash and bank deposits at the end of March amounted to NOK 6.7 billion. The liquidity buffer, including undrawn credit facilities of NOK 2.2 billion, was a comfortable NOK 8.9 billion.
The closing price of the Aker Kvaerner share at the end of March was NOK 580. Accordingly, the company's market capitalization was NOK 31.9 billion, an increase of NOK 9.1 billion from year end 2005. A total of 19.4 million Aker Kvaerner shares were traded on the Oslo Stock Exchange during the first quarter, which constitutes 35 percent of total outstanding shares.
The market is still expected to be strong with attractive opportunities. With the tight labor market in the industry, the focus for Aker Kvaerner will be to continue to select and execute the right projects successfully.
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