Kvaerner Eyes Growth, Mergers as Profits Decline

By Nerijus Adomaitis
Tuesday, October 23, 2018

Kvaerner, a Norwegian builder of oil platforms, aims to increase its revenue by some 40 percent by 2022 by expanding abroad, the company said on Tuesday after reporting a sharp decline in third-quarter earnings that drove down its shares.

Kvaerner's quarterly earnings before interest, tax, depreciation and amortization (EBITDA) fell to 76 million crowns ($9.19 million) from 245 million crowns a year ago.

"In a period where some recently awarded projects are not yet recognising margin and with less effects from milestones and incentives in other projects, this influences EBITDA and margins, as expected," the company said in a statement.

At 0928 GMT, the company's shares traded 4 percent lower at 12.32 Norwegian crowns, a 13-month low.

However, Kvaerner said its prospects are improving and there was a stronger market outlook.

The construction of floating production, storage and offloading (FPSO) vessels for the oil industry is among the most promising opportunities, the company added.

Kvaerner Chief Executive Karl-Petter Loeken said he aims to increase revenues to 10 billion crowns by 2022 from an expected 7 billion in 2018 by consolidating the company's position at home and growing internationally.

Kvaerner is also present in the United States, Canada, Britain, Finland and Russia, where it hopes to achieve growth.

Kvaerner maintained its 2018 outlook and said its EBITDA margin in the fourth quarter was expected to be "somewhat lower" than it was in the third quarter, which was 5.2 percent, down from 15.1 percent a year ago.

It's EBITDA and EBITDA margins have been falling since the third-quarter in 2017 as the company was wrapping up some large contracts, including at Norway's giant Johan Sverdrup oilfield, and no longer benefited from incentive payments.

Loeken declined to comment on the 2019 outlook, but said the company aimed to reduce its costs further to improve profitability, while competition remained "fierce".

More consolidation among oil industry suppliers could help, he added.

"I think if you look some years ahead, further consolidation is probably a natural answer," Loeken told Reuters.

Kvaerner's CEO declined to say whether the company was having any talks with its competitors, which include Aibel, 32 percent owned by Swedish private equity group Ratos.


($1 = 8.2692 Norwegian crowns)

(Editing by Alexandra Hudson)

Categories: Rigs Europe Finance Mergers & Acquisitions Offshore Shipbuilding Offshore Energy Drilling Industry News

Related Stories

BP Expands Oil and Gas Scope in Azerbaijan with New Projects and Exploration Rights

Azeri SOCAR Plans New Agreements with Oil and Gas Majors

Valeura Concludes Eight-Well Drilling Campaign in Gulf of Thailand

Velesto’s Jack-Up Rig Up for Drilling Job Offshore Vietnam

ABS Greenlights SHI’s Multi-Purpose Deepwater LNG Floating Unit

Turkey Discovers New Black Sea Gas Reserve

EnQuest Bags Two Production Sharing Contracts off Indonesia

MODEC Wins ExxonMobil Guyana’s Hammerhead FPSO Contract

CNOOC Makes Major Oil and Gas Discovery in South China Sea

Op-Ed: Kazakhstan’s National O&G Firm Positioning Itself as Global Energy Player

Current News

MODEC, Carbon Clean to Advance FPSO-Mounted Carbon Capture Tech

Aker Solutions, PTAS JV Hooks Brownfield Services Extension off Brunei

CDWE Wraps Up Pin Pile Installation Job for Taiwanese Offshore Wind Farm

BP Expands Oil and Gas Scope in Azerbaijan with New Projects and Exploration Rights

Azeri SOCAR Plans New Agreements with Oil and Gas Majors

TPAO, SOCAR and BP to Ink Caspian Sea Oil and Gas Production Deal

Fugro Lands Deepwater Gas Field Job in Southeast Asia

OMV Exits Ghasha Gas Project off UAE with Lukoil Stake Sale

China's Sinopec Laucnhes $690M Hydrogen Venture Capital Funds

CIP, ACEN Partner Up for First Large-Scale Offshore Wind Farm in Philippines

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com