Norway-based Aker Solutions has boosted its order intake from energy transition opportunities and is upbeat as a coronavirus-related Norwegian tax-relief programme is spurring field developments.
The company expects oil and gas companies will make final investment decisions on more than 30 hydrocarbon projects offshore Norway this year and next.
“One of the most active regions, with many opportunities, is Norway,” said chief executive Kjetel Digre on Wednesday, referring to the company's optimism for project sanctions.
Aker Solutions' growing energy transition-related orders in the first quarter have provided an important source of new contracts.
“In the quarter, this counted for about 35% of the new contracts," Digre said.
Energy-transition work accounted for about 25% of the orders in the fourth quarter of 2020, according to the slides presented by the company.
The Norwegian contractor reported first-quarter 2021 revenue of Nkr 6.5 billion ($780 million), down from 8.6 billion in the same quarter of 2020.
But its earnings before interest, taxes, depreciation and amortisation, excluding special items, totalled Nkr 427 million — an increase compared the same period last year and sequentially.
The company's order intake was Nkr 9.4 billion, while its order backlog totalled Nkr 40.5 billion.
A number of oil and gas projects also are coming up in the international regions where Aker Solutions has a solid presence, Digre said.
30% of tenders are for energy transition
“Tendering activity is high, and Aker Solutions is currently bidding for contracts totalling about Nkr 78 billion,” he said.
About 30% of these tenders are related to energy-transition work, such as offshore wind, carbon capture, hydrogen, and low-carbon solutions for oil and gas including subsea gas compression and electrification, the chief executive said.
"As we move forward, the strong backlog for all our segments is an important foundation for our growth ambitions," Digre said.
Although some near-term restrictions related to the pandemic remain, Aker Solutions expects increased market activity to improve the picture in the future.
The company's outlook for 2021 remains unchanged, however. It expects its overall revenue will be somewhat lower than last year's, with underlying Ebitda seen rising from last year to around the 5.5% to 6.0% level.
The company's first-quarter earnings per share totalled Nkr 0.07.
Aker Solutions said it has a solid financial position with a net cash position of Nkr 794 million and a liquidity buffer of Nkr 8.5 billion at the end of the quarter.
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