First quarter results 2020: Results negatively influenced by global pandemic

27 April 2020 – Kvaerner has in the first quarter taken several precautionary steps to safeguard employees, suppliers and local societies against the risks of the corona virus development. The financial results are negatively impacted by provisions related to covid-19. For the results in 2020 as a whole, it is too early to estimate the total effects. Kvaerner has demobilised the majority of hired-in personnel working on ongoing projects, office staff is working from home offices and several virus precautions influence daily work at the yards. Still, operations are continuing, and ongoing projects are moving forward with reduced capacity.

For the first quarter this year, revenues were NOK 2 192 million for the Field Development segment, compared to NOK 2 158 million one year ago. The corresponding EBITDA results were negative NOK 132 million this quarter, while it was NOK 137 million in the same period last year.

The EBITDA result in the past quarter was negatively influenced by costs and a provision related to corona mitigation of NOK 101 million. Until the uncertainty related to availability and extra costs for projects resources is concluded, margin recognition is temporarily reduced for some projects. In total, these elements have contributed to a negative impact on the EBITDA for the Field Development segment of NOK 192 million for the first quarter 2020.

“For 2020 as a whole, it is too early to assess the total effects of the virus and of the volatile markets. We are in continuous dialogue with our customers about how we can keep progress in ongoing projects, within the framework of the korona precautions. We are doing what we can to maintain progress in spite of the demobilisation of many hired-ins for a period until the situation is concluded”, says Karl-Petter Løken, Kvaerner’s President & CEO.

The order intake was NOK 1 204 million during the first quarter 2020, mainly related to growth in existing projects and some new work for prospects in early phases. The order backlog ended at NOK 7 249 million. One year ago, order intake was NOK 1 691 million and order backlog was NOK 10 196 million.

“The market for new projects is this spring influenced by international and national virus protection measures, and also by how such measures reduce global activity for a period. With some new projects being delayed, we have taken actions to reduce costs, including about 225 employees placed on temporary leave. We do see some key prospects which we are currently actively positioning for. The largest share of such opportunities in 2020 is within renewable businesses and within onshore process industries”, says Løken.

The presentation including financial appendix can be downloaded from www.kvaerner.com and the link below.

ENDS

For further information, please contact:

Media inquiries:
Torbjørn Andersen, Vice President, IR & Communications, Kvaerner, Tel: +47 928 85 542, email: torbjorn.andersen@kvaerner.com

Investor Relations:
Idar Eikrem, EVP & CFO, Kvaerner, +Mob: +47 950 28 363, email: ir@kvaerner.com

Kvaerner is a project execution specialist and a trusted advisor for our clients. We provide engineering, procurement and construction (EPC) services and deliver advanced offshore and onshore installations around the world.

We have offices in seven countries and approximately 2 800 employees. Health, Safety, Security and Environment (HSSE) has the highest priority in our work, and we aim to deliver technology and solutions in a safe and sustainable way. Our passion, experience and expertise realise values for clients and societies. Kværner ASA, through its subsidiaries and affiliates ("Kvaerner"), is an international contractor and preferred partner for operators and contractors within oil and gas, renewable energy and in the field of engineering and fabrication.

In 2019, Kvaerner's Field Development segment had consolidated annual revenues of NOK 9.4 billion and the company reported an order backlog at 31 March 2020 of NOK 7.2 billion. Kvaerner is publicly listed with the ticker "KVAER" at the Oslo Stock Exchange. For further information, please visit www.kvaerner.com (http://www.kvaerner.com).

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