Kvaerner results up, dividend proposed

12 February 2020 – Kvaerner’s results forKvaerner results up, dividend proposed the fourth quarter and for the full year 2019 ended at planned levels. Operating revenues for the last quarter were NOK 2 789 million for the Field Development segment, where also revenues from joint ventures are included. This is an increase of 58 percent from the fourth quarter 2018, when revenues were NOK 1 755 million. In the last period EBITDA was NOK 105 million, an increase of 40 percent compared to EBITDA one year before of NOK 75 million. The Board of Directors propose to pay a dividend of NOK 0.50 per share, equal to about 55 percent of net profit in 2019, and has updated the dividend policy.

2019 was characterised by completion of important projects such as the Johan Sverdrup Utility and Living Quarter Platform for Phase 1 and the normally unmanned platform for Valhall Flank West, as well as new contract awards. In the third quarter, Kvaerner announced a new organisation with three operational areas: Process & Structures, FPSOs and Renewables. Shortly after, the first renewables contract was announced, 11 floating concrete hulls for the wind turbines for the Hywind Tampen project.

We are pleased that the results are according to plan for 2019. We delivered several important projects last year, enabling our customers to start using the facilities on schedule or ahead of schedule. We commence this year with a high activity level in our yards, and the order book also includes important new orders won in 2019. In parallel, we are also pursuing opportunities for several important contracts that we see in our target markets.

For the full year 2019, the operating revenues for the Field Development segment increased by 30 percent to NOK 9 427 million, compared to NOK 7 253 million in 2018. The corresponding EBITDA was NOK 512 million for 2019, versus NOK 487 million in 2018.

The total order intake in 2019 was NOK 6 902 million versus NOK 9 827 million in 2018. The order backlog was NOK 8 200 million at the end of 2019, while it was NOK 10 625 million at the end of 2018. The company has NOK 2 324 million in cash and bank deposits, and zero net debt.

It is expected that annual revenues and EBITDA will decline in 2020 compared to 2019, as an effect of the market cycle with few new orders in 2018 and 2019. During 2020, 2021 and beyond, it is expected that customers will award key contracts. Kvaerner’s strategy is to use these market opportunities to develop and grow the operations and results over the coming years.

Kvaerner’s financial results is an effect of a business characterised by projects running over long period. The overall financial performance is best assessed looking at longer intervals. A solid financial platform is a key enabler for growth in new target segments and for establishing alliances with strategic partners.

Hence, the Board of Directors has decided to change the dividend policy, where dividend payment until now has been considered two times per year, to an updated policy where dividend payment is evaluated once every year. The following updated dividend policy decided by the Board of Directors is implemented with immediate effect:

• Kværner ASA’s dividend policy is based on an annual evaluation of dividend distribution. Decisions as to actual dividend payments shall depend on outlook, liquidity and considerations such as alternative use of cash and future strengthening of the company’s financial structure. The dividend payments could either be through cash dividend and/or share buyback.

• Extraordinary dividends may be considered if, and when the liquidity, financial strength and financial structure of the company allows.

• The Annual General Meeting will approve the final and total annual dividend based on a proposal from the Board.

The Board of Directors also proposes to the Annual General Meeting to approve distribution of a dividend of NOK 0.50 per share after the fourth quarter 2019. This corresponds to a total dividend payment of NOK 134.5 million, equal to about 55 percent of Kvaerner’s net profit in 2019. With the proposed payment after 2019, the total dividend distributed since today’s Kvaerner was listed in 2011 corresponds to about 60 percent of net profit in the same period.

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, Head of IR & Communications, Kvaerner, Mob: +47 928 85 542, email: torbjorn.andersen@kvaerner.com

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

About Kvaerner:
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 platforms, onshore plants, floating production units (i.e. FPSOs) and renewable energy solutions.

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 December 2019 of NOK 8.2 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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