Aker Solutions posts weaker Q2 earnings

Aker_Solutions__Q2

Aker Solutions' second quarter consolidated revenue was US$ 1.42 billion, compared with US$1.47 billion in the same period in 2010. Profits in the quarter were negatively affected by operational challenges.

"We have a strong order intake which reflects high tendering and activity levels across all business segments. In fact, our order backlog has increased 19 per cent since the beginning of the year. However, this quarter has also provided us with some reminders about the importance of further improving our operational performance," said Øyvind Eriksen, executive chairman of Aker Solutions said in a company statement.

Eriksen elaborated on the operational problems saying that quality costs related to execution issues in Brazil alone amounted to US$23.7mn in Aker's Subsea and Process Systems businesses.

Order intake in the second quarter was US$2.6 billion. At the end of the second quarter, Aker Solutions' order backlog was US$8.39 billion.

During the second quarter, Aker Solutions concluded the structural changes outlined at the company's capital markets day in December 2010.

"Today Aker Solutions is a pure oil service player focusing on engineering, technology, products and field-life solutions. We will convert our financial strength to capacity with the aim of facilitating further growth," said Øyvind Eriksen.

Aker forecast considerable deepwater spending growth. With high oil prices, declining production and ageing infrastructure, the market looks positive for offshore field developments.

Aker added that: "the subsea market shows solid long term fundamentals, as the shift towards deep-water developments has resulted in an increase in the number of subsea developments. We believe subsea equipment markets are moving towards a period of stronger growth in major offshore regions."

The market for products for onshore gas field treatment in the Middle East were very active.

Alain Charles Publishing, University House, 11-13 Lower Grosvenor Place, London, SW1W 0EX, UK
T: +44 20 7834 7676, F: +44 20 7973 0076, W: www.alaincharles.com

twn Are you sure that you want to switch to desktop version?