Aker Kvaerner Pleased with First Quarter Performance

Aker Kvaerner reported positive results and says performance is on track in the first quarter. Earnings before interest, tax, depreciation and amortization (EBITDA) amounted to NOK 324 million, compared with NOK 209 million in the same period last year. Few major contracts were announced, but a steady stream of orders resulted in a satisfactory NOK 7.3 billion order intake in the first quarter 2004. The order backlog at the end of March was NOK 31.1 billion.

All main business units in the Oil & Gas, Process and Pulping & Power segments developed positively and as planned in the first quarter.

The cash position is strong. At the end of March cash and short-term interest-bearing receivables amounted to NOK 3.7 billion.

Aker Kvaerner has an ambition to increase the EBITDA to NOK 1.75 billion in 2006. In about one year, the group expects that the EBITDA will reach NOK 1.5 billion on an annualized level.

A focused group

In the first quarter this year Kvaerner ASA announced a three-way reorganiaation of the group, which has resulted in the formation of Aker Kvaerner, a focused industrial group with activities within the oil, gas, energy and process industries. The figures in this report are prepared as if the restructuring and refinancing was completed before January 1, 2002.

For Aker Kvaerner, the plan was concluded on April 2, 2004 when the group was listed on the Oslo Stock Exchange with ticker AKVER.

Financially, the plan involved a NOK 2.1 billion equity issue, transfer of NOK 4.1 billion of subordinated debt maturing in 2011 to Aker Kvaerner ASA and repayment of NOK 3.1 billion debt which matured at the end of 2004. Furthermore, Aker Kvaerner O&G AS, a wholly owned subsidiary of Aker Kvaerner ASA, placed a EUR 260 million international bond with seven year maturity in the market, and arranged a EUR 150 million term and revolving credit facility maturing in 2009.

The Norwegian based industrial holding company Kvaerner ASA is the majority shareholder in Aker Kvaerner ASA, currently holding 71 per cent of the shares. Upon completion of an exchange offer presented to Kvaerner ASA shareholders on April 20th, Kvaerner ASA's holding in Aker Kvaerner ASA will be reduced to approximately 58 percent.