Aker’s revenue took a hit in the third quarter, according to today’s company results.
In the update, the service firm hinted further jobs cuts could be on the cards.
Aker’s turnover was NOK6billion compared to 7.5billion the previous year. Earnings before interest and taxes (EBIT) were NOK 286million in the quarter, compared with last year’s NOK 329million.
The firm also confirmed it was ahead of scheduled with its bid to strip 30% of costs out of the business by 2017. Aker expects to be half way to its target by the end of the year, surpassing its target of a quarter.
However, the firm hinted that further job losses could be possibility.
Its report read: “The company continues to be vigilant about its workforce capacity to ensure it fits market conditions.”
While Aker said there was “some signs of recovery”, the firm said it was targeting work outside Norway where it has had more recent success.
The report added: “The outlook for oil services remains challenging and projects are being postponed across the industry. There are some signs of a recovery, primarily in the brownfield segment, amid expectations that oil prices will stabilize at a higher level in 2017.
“Industry cost cuts are having an effect, with break-even costs coming down on projects, which may allow some major developments to be sanctioned in the next 12 months. Aker Solutions’ greatest growth potential is outside of Norway, where the company has been expanding. Tendering activity is healthy and totals about NOK50billion.”
The company won NOK3.5billion in orders in the third quarter, including two maintenance and modifications orders from Statoil at the Troll and Utgard fields offshore Norway. Orders also included two five-year framework agreements for potential future deliveries of subsea production systems and lifecycle services at BP-operated oil and gas fields globally, as well as a two-year contract extension to provide reliability and maintenance services at offshore facilities for Brunei Shell Petroleum.
“We delivered another quarter of strong execution and operational improvements, maintaining steady margins amid continued industrywide challenges,” said Luis Araujo, chief executive officer of Aker Solutions.
“Our solid finances, streamlining efforts and good customer relationships will benefit us now and when the market recovers.”
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