Norwegian contractor Aker Solutions widened its losses in the final quarter of 2020 as the impact of the Covid-19 pandemic and market volatility hit revenues, but activity is picking up in oil and gas as well as low-carbon sectors.

Aker posted a fourth-quarter loss of Nkr844 million ($100.2 million), compared to a loss of Nkr129 million during the final quarter of 2019.

Weighing on Aker’s results in the recent quarter were right-of-use asset impairments of about Nkr390 million and tax asset impairments of approximately Nkr30 million.

Taking into account one-off costs, however, Aker still posted a net loss, excluding special items, of Nkr357 million, compared to a profit of Nkr54 million a year ago.

The weaker result in 2020 came as the Oslo-listedcompany saw revenues fall from Nkr10.05 billion in the fourth quarter of 2019, to less than Nkr6.88 billion in the recent quarter.

It attributed the decline in revenue to lower activity across all of its business segments, with the company noting a number of large engineering, procurement and construction contracts had been completed during 2020.

It also noted that it had been a challenging year operationally, due to the Covid-19 pandemic and resultant market volatility.

Order book bolstered

Despite these challenges, Aker’s order book grew 31%, compared to 2019, with the share of renewable energy and low-carbon projects also up compared to the previous year.

Order intake during the final three months of 2020 amounted to Nkr6.8 billion, bringing the company’s backlog, as of 31 December, to Nkr38 billion, with 25% of the projects on its books related to the energy transition.

Project sanctioning on the up

Aker is also positive with its outlook for 2021, noting project sanctioning was increasing both from its traditional oil and gas segment, as well as projects related to the energy transition.

"Many of our oil and gas customers now plan projects with solutions that will enable low carbon emissions from the production,” said chief executive Kjetel Digre.

“Our expertise on delivering projects for electrification, carbon capture or subsea processing gives us a competitive position for this market trend. Industrialised concepts, effective project execution and close collaboration between suppliers and customers will be key to ensure that upcoming developments are sustainable also financially.”

Aker confirmed it was currently engaged in tenders totalling about Nkr76 billion, with one-third of those related to the energy transition in areas such as wind, electrification, carbon capture, subsea gas compression and hydrogen.

Despite this, the company also warned that it still anticipates revenue this year to be “somewhat lower” than 2020, based on its current backlog, ongoing front-end engineering and design work and tendering activity.

Finance

Aker Solutions sees losses widen as revenues slump on lower activity