April 29, 2013 / 9:26 AM / 5 years ago

UPDATE 1-Shares in Norway's Aker Solutions dive after profit warning

* Sees Q1 EBITDA at NOK 868 mln vs fcast NOK 1.13 bln

* Revenue seen at 11.1 billion vs f‘cast 11.6 billion

* Warns of cost overruns and project delays

* To launch further reorganisation

* Shares plunge 22 pct (Adds share, analysts, quote by CEO, background)

By Gwladys Fouche and Henrik Stolen

OSLO, April 29 (Reuters) - Aker Solutions, Norway’s flagship oil services firm, has warned of lower-than-expected results across most of its divisions due to cost overruns and project delays, sending its shares down more than 20 percent.

Aker Solutions had worked to rebuild investors’ confidence after it was hit with cost overruns and delays at its operations in Brazil two years ago, appointing Oeyvind Eriksen as chief executive to lead a reorganisation.

The shares had doubled in value since slumping as low as 51.10 crowns in 2011, but the group is now launching a further reorganisation including the appointment of new heads for problematic divisions and additional executives to focus on projects in Norway, its core market.

The company said core profit (EBITDA) would fall to 868 million crowns ($148.4 million) from 1.0 billion a year ago, undershooting an average forecast of 1.13 billion, according to Thomson Reuters Starmine.

Revenue is expected to rise to 11.1 billion from 9.8 billion crowns a year ago, but falling short of an average analyst expectation for 11.6 billion.

“This is a serious profit warning, both in terms of size and the fact that it is spread out (over several divisions),” said Haakon Amundsen, an analyst at ABG Sundal Collier.

First-quarter results were hit by cost overruns at a major North Sea project - the building of a new platform at the Ekofisk oilfield - as well as losses of 117 million crowns at two divisions.

But the company said other divisions were also seeing delays and cost overruns, reviving concerns about the way it handles its work.

Aker Solutions shares were down 21.6 percent at 0755 GMT, while the Oslo benchmark index was down 0.5 percent.

“Some of the quality issue are, simply speaking, unacceptable,” Eriksen said. “We have worked hard to avoid such mistakes, but there is still a way to go.”

Aker Solutions’ main competitors are Schlumberger, Technip, FMC Technologies and Saipem .

$1 = 5.8503 Norwegian kroner Editing by David Holmes

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below