Aker Solutions Shares Soar on New Orders, High Tendering
OSLO, Nov 6 (Reuters) – Oil services firm Aker Solution reported an unexpected rise in new orders on Wednesday and predicted robust tendering ahead, relieving investors who expected the firm to be hit by the sector's investment slowdown.
Norway's Aker Solution, which focuses on offshore work in places like the North Sea, Brazil and West Africa, said it collected 11.9 billion crowns ($2 billion) of new orders, well ahead of expectations for 7.3 billion, even as its profit figures missed expectations.
"We combined a decent third quarter with a prosperous market outlook, though with somewhat higher uncertainties than in recent years," Executive Chairman Oeyvind Eriksen said.
"Tender activity during the third quarter was robust, supporting expectations for further growth even as many oil companies have become more concerned with preserving cash."
Oil firms around the globe have cut back capital spending, preserving cash for dividends as years of robust growth has pushed free cashflow into the red and pushed up costs for everything from labour to equipment.
Despite the caution, investors focused on the order increase and the tendering outlook, sending the stock to 88.05 crowns by 0835 GMT, well ahead of the 0.2 percent rise in the European oil and gas index.
Prior to Wednesday's jump, the stock had underperformed the index, falling 7 percent over the previous three months against a rise of 7 percent in the benchmark, as Aker Solutions suffered from a slowing order intake, weak execution of some key projects and easing growth in global oil and gas investments.
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