Kvaerner 1Q Growth Continues Despite Odds

High revenues continued in spite of challenging markets. Kvaerner (KVAER.OL) continued the high activity also in the first quarter of 2015 and revenues ended at NOK 3 525 million. The order intake was good in spite of the challenging markets, which enabled Kvaerner to maintain the order backlog level from year-end. In addition to focusing on predictable execution of ongoing projects, Kvaerner also continues to prioritise measures to reduce costs and improve competitiveness for upcoming projects.

Operating revenues were to NOK 3 525 million in the first quarter 2015 compared to NOK 3 489 million for the first quarter 2014. While the Edvard Grieg platform project got closer to the final phases during the quarter, the large Nyhamna onshore plant project climbed to a peaking activity level.

As indicated in fourth quarter, Earnings before Interest, Taxes, Depreciation and Amortisation (EBITDA) and EBITDA margins has decreased in first quarter 2015 compared to previous periods. EBITDA for the quarter were NOK 101 million, compared to NOK 170 million in the same period last year. EBITDA margin for first quarter 2015 was 2.9 percent, a reduction from 4.9 percent in corresponding period in 2014. As previously announced, the reduction in EBITDA and -margin reflects projects with a relatively wide margin range, including continued challenging cost developments.

Net current operating assets (NCOA) were negative NOK 541 million at quarter end, compared to negative NOK 922 million at year-end. The equity ratio was strengthened, and was at 31 March 33.6 percent, up from 31.5 percent at 31 December 2014.

The order intake in the first quarter totalled NOK 3 610 million, including scope of work of jointly controlled entities, compared to NOK 1 283 million in the same quarter last year. The order backlog at the end of the quarter, including scope of work of jointly controlled entities, amounted to NOK 15 840 million. This continues the solid order backlog and visibility from the end of 2014, when the order book was NOK 16 451 million.

- The margins we deliver this quarter are not up to our ambitions, but we will use it as an inspiration for further cost improvements. Our first priority is to execute on-going projects safely and predictably. Even if there is much uncertainty with respect to how the markets will develop over the next 12 to 24 months, Kvaerner see a long term fundamental market demand for our core expertise and solutions. We continue to drive our cost and productivity improvements in close cooperation with the oil companies, and we are positioned in segments where there will be key contract awards in 2015, says Jan Arve Haugan, President & CEO of Kvaerner.