Kvaerner’s cost cutting strategy has resulted in the Norwegian firm reporting a profit of NOK178million in its fourth quarter 2015 results, which it says will increase resiliance against uncertain market conditions.
The fourth quarter result (adjusted EBITDA) of NOK178millio is an increase from both the third quarter 2015 and from the fourth quarter 2014, when the EBITDA results were NOK148 million and NOK175 million respectively.
Kvaerner said a good order backlog of NOK14.3billion gives the company a sound starting point for the activity level through 2016.
For 2015 and 2016 combined, Kvaerner will reduce overhead cost with approximately 20%.
The revenues in the fourth quarter were NOK2.57billion, compared to NOK3.59billion in the same quarter in 2014. For the full year 2015, revenues were NOK12billion, down from NOK 13.9billion in 2014.
Adjusted EBITDA for the full year 2015 was NOK536million, down from NOK828million in 2014.
Despite the profits, the Kvaerner board has proposed no dividend distribution during the first half of 2016.
The firm said in a statement: “A strong balance sheet and cash position is important to maintain the resilience through a challenging cycle. Retaining the solid financial platform may also provide additional opportunities which Kvaerner can leverage in the market.”
Chief executive Jan Arve Haugan, said: “Through last year including the fourth quarter, Kvaerner managed to maintain a good activity level, and the productivity has developed positively in several areas.
“We are continuing to meet all key milestones in our project portfolio, and we were proud to contribute to first oil on the new Edvard Grieg platform in late November.”
The company continues to have a strong balance sheet with a net cash position of almost NOK1.6billion.
Kvaerner was awarded almost 90% of the contract values for platform substructures to Johan Sverdrup. In a competitive joint venture with KBR, we were awarded one of the largest topside contracts in the market last year, for the Utility & Living Quarter platform at Johan Sverdrup.
“For 2016, we see some few opportunities for new contracts of moderate size. Simultaneously, we see that the timing of key decisions is uncertain. This makes it difficult to predict the activity level in 2017, but our order backlog provides a good starting point for our operations in the current year and the next,” added Haugan.