Kvaerner Improves Financial Results and Outlook

Source: www.gulfoilandgas.com 7/6/2020, Location: Europe

The second quarter has developed positively for key ongoing contracts and frame conditions, compared to the situation in the first quarter when the corona pandemic started. In sum, the effect is significant improvement of financial results and outlook, compared to previous guiding.

For the first quarter, margin recognition was suspended for some projects, and these effects have been reversed in the second quarter. Kvaerner expects revenues of approximately NOK 1.5 billion and EBITDA-result of about NOK 175 million for the second quarter this year (Field Development segment). For the full year, revenues are anticipated to total approximately NOK 7.5 billion. The corresponding underlying EBITDA margin, excluding expected covid-19 costs of about NOK 150 million for the full year, is expected to be about five percent).

The market outlook again presents opportunities for gradual growth. The temporary adjusted tax regime decided by Norwegian authorities during the second quarter provides incentives to oil companies to start projects. This has a significant positive impact on Kvaerner’s market opportunities. There is high activity for positioning and bidding for new contracts especially within Renewables. Order intake in the second quarter was around NOK 3.3 billion, including new contracts and orders for additional scope in ongoing projects.

Demobilisation of hired-in project resources at the yards had a negative cost impact as communicated in Q1 2020. During the second quarter Norwegian authorities have started to allow foreign hired-in personnel to travel to Norway. As Kvaerner’s priority is always HSSE, a stepwise remobilisation of hired-ins is used to ensure control. Remobilisation of hired-in personnel started in May and will continue though the autumn. Offices are again opened for normalised operations, but some corona related precautions remain in place.


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