Kværner ASA: First quarter results 2018: Robust results and order intake
25 April 2018 - Kvaerner's Field Development segment delivered EBITDA results of NOK 205 million. This is a growth of more than 70 percent compared to one year ago when Earnings before interest, taxes, depreciation and amortisation (EBITDA) for the Field Development Segment, ended at NOK 120 million. A strong order intake in the first quarter resulted in an order backlog at the end of first quarter of NOK 11 118 million. One year ago, the order book was NOK 10 841 million. Kvaerner's strategy for increased business from new segments is yielding results. Activities in growth segments already counts for approximately 10 percent of annual revenues.
The quarterly revenues for the Field Development Segment were NOK 1 944 million, about the same level as in the first quarter 2017 when it was NOK 2 068 million.
"We see that implementation of improvements is yielding several positive effects in parallel. We are continuously reducing our cost base and increasing our productivity, not the least through investments in digitalisation, in our facilities and in competence. We are taking new steps to further increase quality in the work flow, and this has additional impact on both cost and productivity. Hence, we reach both project milestones and quality targets set by the customers. This leads to performance based payments and sound financial results. At the same time, we increase our competitiveness, both in our traditional market and in growth segments", says Idar Eikrem, interim CEO for Kvaerner.
Kvaerner has for decades been a leading contractor for delivery of complete topsides and substructures to offshore oil and gas platforms. This will continue to be a key market, while the company's strategy is to also develop more new business in adjacent markets. In mature oil and gas provinces, a certain decline in the demand for new, large offshore platforms is anticipated. In balance, an increase is expected for satellite field tie-backs, including small wellhead platforms and modifications of existing host platforms. In addition, Kvaerner has more than doubled its business for decommissioning of old offshore facilities, and established a solid position for advanced marine operations. The company is also actively pursuing offshore wind power projects.
"Our ambition is to further increase activity in growth segments over the next few years. Already in 2018, revenues from such business are expected to be around NOK 700 million. In addition, we have the ongoing extensive upgrading of the Njord A platform", says Eikrem.
All current projects in Kvaerner's portfolio are on track. Kvaerner expects a number of small and medium sized prospects in the market to be awarded during 2018 and 2019. Most of these prospects are within Kvaerner's growth segments. In addition, the company sees some few larger prospects in its traditional market for topsides and substructures with expected awards during this year and next year.
The presentation including financial appendix can be downloaded from www.kvaerner.com and the link below.
ENDS
For further information, please contact:
Investor inquiries:
Ingrid Aarsnes, VP Investor Relations & Communications, Kvaerner, Tel: +47 950 38 364, email: ir@kvaerner.com
Media inquiries:
Torbjørn Andersen, Head of Communications, Kvaerner, Tel: +47 928 85 542, email: torbjorn.andersen@kvaerner.com
About Kvaerner:
Kvaerner is a leading provider of engineering, procurement and construction (EPC) services, and delivers offshore installations and onshore around the world. Kværner ASA, through its subsidiaries and affiliates ("Kvaerner"), is an international contractor and preferred partner for oil and gas operators and other engineering and fabrication contractors. Kvaerner and its approximately 2 600 HSSE-focused and experienced employees are recognised for delivering some of the world's most amazing and demanding projects.
In 2017, Kvaerner's Field Development segment had consolidated annual revenues of NOK 7.6 billion and the company reported an order backlog at 31 March 2018 of NOK 11.1 billion. Kvaerner is publicly listed with the ticker "KVAER" at the Oslo Stock Exchange. For further information, please visit www.kvaerner.com.