Norway’s oil services company Aker Solutions returned to quarterly profit as its revenues grew by 5% pushed up by increased activity in Norway.
Aker Solutions on Wednesday posted a net profit of NOK 19 million for the fourth quarter 2017 compared to a net loss of NOK 268 million in the prior-year period.
The company’s revenue rose to NOK 6.4 billion in the quarter from NOK 6.1 billion a year earlier, driven by increased modifications activity offshore Norway and growth from acquisitions.
Aker Solutions said it won the most orders in almost four years in the fourth quarter of 2017 amid signs of a market recovery and as an improvement program helped margins.
“We’re seeing increasing signs of recovery as break-even costs come down and more projects are sanctioned, particularly offshore Norway where we are well-positioned,” said Aker Solutions Chief Executive Officer Luis Araujo.
Orders in the quarter were NOK 13.4 billion, bringing the backlog to NOK 34.6 billion and most were for projects in Norway.
Aker Solutions in the quarter was awarded 27 front-end engineering orders, bringing the full-year number to an all-time high of 124 awards. That’s up from a record 81 contracts the previous year.
The company noted that, with a liquidity buffer of NOK 5.7 billion at the end of the year, the board proposed that no dividend payment be made for 2017, considering it prudent to exercise caution and conserve cash amid continued uncertainty about the market outlook.
Signs of recovery
According to the company, the outlook for oil services remains challenging as projects continue to be postponed and there is pressure on pricing. Still, there are increasing signs of a recovery, particularly offshore Norway where there is a pickup in activity and in the brownfield segment where oil companies are focusing on optimizing output from existing fields, the company said. Industry efficiency improvements are bringing down break-even costs on developments, which is spurring more project sanctions.
Tendering is steady and Aker Solutions is bidding for contracts totaling about NOK 50 billion. About two-thirds of these are in the subsea area, where the company anticipates several key projects to be awarded in the next six months, particularly in Norway, Brazil and Asia Pacific.
Aker Solutions sees overall revenue somewhat up in 2018 from 2017, helped by the recent new orders and improving activity in the maintenance and modifications markets.
Aker Solutions also said on Wednesday it was entering offshore floating wind sector through an investment in floating wind power technology company, Principle Power Inc.
Offshore Energy Today Staff