Aker Solutions 2Q Earnings Lower Than Expected
Aker Solutions' operating revenues in the second quarter of 2011 were NOK 7.8 billion. Earnings before interest, tax, depreciation and amortization amounted to NOK 636 million. Order intake in the quarter was NOK 14.3 billion.
"We have a strong order intake which reflects high tendering and activity levels across all business segments. In fact, our order backlog has increased 19 percent since the beginning of the year. This is in line with our long term growth plan. However, this quarter has also provided us with some reminders about the importance of further improving our operational performance," said Øyvind Eriksen, executive chairman of Aker Solutions.
Second quarter consolidated revenues was NOK 7 809 million, compared with NOK 8 096 million in the same period in 2010. EBITDA for the second quarter of 2011 was NOK 636 million (8.1 percent EBITDA margin), compared to NOK 853 million one year ago. Profits in the quarter were negatively affected by execution challenges and the final arbitration ruling on Blind Faith.
"In the second quarter quality costs related to execution issues in Brazil alone amounted to NOK 130 million in our Subsea and Process Systems businesses. With quality and customer satisfaction as two of our top priorities, this is obviously disappointing," Eriksen said.
Order intake in the second quarter was NOK 14.3 billion. At the end of the second quarter Aker Solutions' order backlog was NOK 46 billion - an increase of NOK 5.5 billion from the previous quarter.
During the second quarter Aker Solutions concluded the structural changes outlined at the company's capital markets day in December 2010. The final step was the demerger and separation from specialized EPC contractor Kværner ASA.
"Today Aker Solutions is a pure oil service player focusing on engineering, technology, products and field-life solutions. We have a strong cash position fueled by solid earnings and gains from strategic divestments. We will convert our financial strength to capacity with the aim of facilitating further growth. However, we will also ramp up our efforts of building a stronger quality culture to further improve our day-to-day operations," said Øyvind Eriksen.
"Our growth plans are ambitious and we need qualified people to meet these objectives. In the first half of 2011 we have hired almost 1 200 new colleagues worldwide. I am pleased to see that so many new colleagues share our technology vision and company values," adds Eriksen.
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