Second quarter results 2011

12 August 2011 – We are delivering a robust second quarter despite the loss on the Blind Faith project and a loss provision on the Longview project.

“We are delivering a robust second quarter despite the loss on the Blind Faith project and a loss provision on the Longview project”, says Jan Arve Haugan, President & CEO of Kvaerner.

Operating revenues in the second quarter amounted to NOK 3 947 million, compared with NOK 2 842 million for the second quarter 2010, an increase of 39 percent. The large increase reflects high activity in the Upstream segment during the quarter with peak activity on several projects, including the Kashagan Hook-up project. The project has demobilised all personnel from the facility and is in the process of closing the project. Subsequently, the activity level and earnings will be reduced in the second half of the year.

“Generally, the activity in Kvaerner will fluctuate over the quarters due to the phasing of projects and the project portfolio. This is the nature of the EPC business. Over the last quarter our employees have delivered several successful projects on schedule, including the Gudrun jacket, the Skarv FPSO and the Kashagan Hook-up project. We have listed the company on Oslo Børs and secured a NOK 3 billion credit facility. It has been an eventful quarter”, Haugan continues.

EBITDA for the second quarter 2011 ended at NOK 192 million, an increase of NOK 227 million compared to negative NOK 35 million in the same quarter last year. As a result the EBITDA margin for the second quarter 2011 was 4.9 percent compared to negative 1.2 percent in the corresponding period in 2010. The EBITDA for the second quarter is affected by the Blind Faith arbitration ruling. The ruling resulted in a recordable loss of NOK 165 million in the second quarter 2011, of which the net cash effect was NOK 42 million negative for the same quarter. In addition Kvaerner has made a further loss provision of USD 50 million (NOK 278 million) in respect of the Longview project in the second quarter. 

The order intake in the second quarter totalled NOK 1 607 compared to NOK 2 048 million in the second quarter 2010.  At 30 June 2011, the order backlog amounted to NOK 13 296 million, a decrease of NOK 2 380 million from 31 March 2011.

“We believe the outlook for our key markets is exceptionally good. Recent discoveries on the Norwegian Continental Shelf are also very promising for the future in our home yard.  We start our new journey from a solid foundation. Our financial position is strong, our organisation is highly skilled and experienced and we have a track record second to none within EPC deliveries. I am confident that the new chapter in Kvaerner’s history will be exciting and positive”, Haugan concludes.

For further information, please contact:

Media:
Mariken Holter, SVP Communications, Kvaerner, Tel: +47 67 52 74 35, Mob: +47 91 78 73 58

Investor relations:
Ingrid Aarsnes, SVP Investor Relations, Kvaerner, Tel: +47 67 59 50 46, Mob: +47 950 38 364

About Kvaerner:
With more than 3 500 HSE-focused and experienced employees, Kvaerner is a specialised provider of engineering, procurement and construction (EPC) services for offshore platforms and onshore plants. Kværner ASA, through its subsidiaries and affiliates ("Kvaerner"), is an international contractor that plans and realises some of the world's most demanding projects as a preferred partner for upstream and downstream oil and gas operators, industrial companies and other engineering and fabrication contractors.

In 2010, the Kvaerner group had aggregated annual revenues of more than NOK 13.3 billion and the company had an order backlog at 30 June 2011 of NOK 13.3 billion. Kvaerner was publicly listed with the ticker "KVAER" at the Oslo Stock Exchange on 8 July 2011. For further information, please visit www.kvaerner.com.