Aker Solutions Sees Less in Revenues Next Year
Oil services firm Aker Solutions (AKSO.OL) expects up to 600 million crowns ($69.36 million) less in revenues next year as it failed to win a renewed key contract with Statoil (STO), the firm said on Tuesday, sending its shares sharply lower.
Aker Solutions is a main supplier of maintenance and modifications services at Statoil-operated fields in Norway through a 10-year frame agreement that expires in summer 2016. It provides work for about 900 onshore and offshore employees.
On Tuesday, four companies that did not include Aker Solutions were awarded a new main supplier contract, expected to force the company to do a new round of reductions.
Aker Solutions' maintenance and modification business has already been reduced by about 750 permanent positions as falling crude prices have forced oil companies to scale back on spending and putting projects on hold.
"We're disappointed by the outcome of this bid process, which was on terms similar to those of other MMO contracts that we've secured recently in Norway, the UK and Canada. Now we have to evaluate the consequences of this latest development", Aker Solutions' Chief Executive Officer Luis Araujo said in a statement.
The firm said it anticipated lower work volumes representing about 500-600 million Norwegian crowns in revenue next year when the current agreement with Statoil expires.
Shares in Aker Solutions were down 8.1 percent to their lowest level in more than two months at 30.7 Norwegian crowns at 14.05 GMT, compared to 2.1 percent rise in the Oslo Benchmark index.
ABG Sundal Collier analyst Haakon Amundsen said he expected earnings-per-share estimates to come down about 10 percent from 2017 and outwards, everything else being equal.
"I had expected that they would keep their market share. Given how difficult the market currently is, one should want them to win the contracts they can. No wonder the shares are down", he said.
(Reporting by Henrik Stolen)
