Engineering group Aker Solutions has recorded a drop in its earnings before interests (EBITDA) on the previous year ahead of its planned split in September.
EBITDA at the company as it stands fell by $57.7million to $69.2million in the second quarter of the year, despite a 17% increase in revenue to $2.1billion in the period.
The company has also published its first pro forma results for the two prospective companies following the split.
Under the planned demerger the New Aker Solutions – a recently created subsidiary of the Norwegian firm, which is looking to list on the Oslo Stock Exchange – will take over Aker Solutions’ subsea; umbilicals; maintenance, modifications and operations (MMO); and engineering divisions.
After its first day listed, the New Aker Solutions will then operate under the Aker Solutions name.
The second quarter revenues for the new company rose to $1.3billion from $1.2billion a year earlier, driven by a 13% increase in subsea equipment sales.
The company’s EBITDA increased by $17.9million to $95.6million in the same period.
“In the new Aker Solutions, the favorable trend continues for the subsea, umbilicals and engineering businesses, while the MMO business in Norway faces a continued challenging market over the next couple of years,” said Øyvind Eriksen, Aker Solutions’ chairman.
“The new Aker Solutions is well-positioned in the fast-growing deepwater and subsea segments and sees opportunities for further growth in markets including Brazil, the North Sea, Atlantic Canada, Mexico, Angola and West Africa.
“The new Aker Solutions’ high order backlog gives confidence in a robust medium-term outlook. Key wins in Brazil, Angola and Norway, including the Kaombo and Johan Sverdrup contracts, also bolster the longer term outlook for the company.”
Pro forma revenue for the other company, which will be called Akastor and include drilling technologies; Aker oilfield services; process systems; surface products and business solutions, grew by 25% in the second quarter to $970million.
But the company recorded a pro forma EBITDA loss of $20.8million in the quarter versus a profit of $48.9million a year earlier, affected by one-off items totalling $72.8 million, including a previously announced provision on the Aker Wayfarer, a vessel in the Aker Oilfield Services unit.
“Akastor’s portfolio of businesses provides opportunities for growth in key markets across the world from West Africa to Saudi Arabia and to Southeast Asia,” Eriksen said.
“Drilling Technologies, the world’s second-largest offshore drilling systems and life-cycle services company, is expected to benefit from growing demand for services on its installed base of equipment.
“Each Akastor business will be developed independently to unlock its full potential, be it through organic growth, strategic partnerships or mergers and acquisitions activity.
“An allocation strategy should be developed at an early stage to make sure the capital invested yields the best shareholder returns possible.”
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