Norwegian engineering and construction services company Kvaerner recorded a profit in its fourth quarter 2017 as opposed to a loss in the prior-year period.
In its financial report on Thursday, Kvaerner posted a profit of NOK 149 million ($18.9M) for the fourth quarter of 2017 compared to a loss of NOK 100 million ($12.7M) in the corresponding period of 2016.
Kvaerner’s total revenues in the quarter, including jointly controlled entities (Field Development segment), were NOK 1.8 billion compared to revenues of NOK 2.4 billion in the fourth quarter of 2016. Kvaerner’s EBITDA result for 4Q 2017 was NOK 234 million compared to NOK 232 million in the prior-year period.
At the end of 2017, Kvaerner’s order book was NOK 8.1 billion, up from NOK 6.5 billion one year earlier.
Jan Arve Haugan, Kvaerner’s President & CEO, said: “The oil industry has been through three years of significant market shifts, and we are pleased that Kvaerner is one of few companies that have managed to deliver sound results every single quarter in this period. Now, we see that the market decline is leveling out, and we expect some few, but important prospects to be decided during 2018 and 2019.”
Kvaerner said that its board of directors has proposed no dividend at this point.
Hauga added: “We have said that we would strategically develop Kvaerner in segments adjacent to our traditional markets where we can leverage our leading expertise and facilities. We have now established an expanded operation in growth segments as additional legs for Kvaerner’s business. Our long term ambition is to grow Kvaerner’s activities even further.”
Kvaerner’s order intake in the fourth quarter 2017 was NOK 1.7 billion, compared to NOK 768 million in fourth quarter last year.
Looking at the market short-term, the company’s traditional market segments like field development market seem to be leveling out. However, Kvaerner expects that the market will continue to be influenced by strong competition and over capacity within the contracting industry.
For 2018, the full year gross revenue is expected to be NOK 6-7 billion.
During first half of 2018, positive effects from projects being delivered and reaching 20 percent completion are expected to impact results. For full year 2018, margins will be lower than for 2017 due to few major projects in completion phases and the composition of the project portfolio.
Longer term, Kvaerner sees potentially some decline in traditional markets for large new platforms but increasing opportunities for smaller new platforms and in growth segments.
Offshore Energy Today Staff