Kvaerner improves financial results and outlook

06 July 2020

The second quarter has developed positively for key ongoing contracts and frame conditions, compared to the situation in the first quarter when the corona pandemic started. In sum, the effect is significant improvement of financial results and outlook, compared to previous guiding.

For the first quarter, margin recognition was suspended for some projects, and these effects have been reversed in the second quarter. Kvaerner expects revenues of approximately NOK 1.5 billion and EBITDA-result of about NOK 175 million for the second quarter this year (Field Development segment). For the full year, revenues are anticipated to total approximately NOK 7.5 billion. The corresponding underlying EBITDA margin, excluding expected covid-19 costs of about NOK 150 million for the full year, is expected to be about five percent).

The market outlook again presents opportunities for gradual growth. The temporary adjusted tax regime decided by Norwegian authorities during the second quarter provides incentives to oil companies to start projects. This has a significant positive impact on Kvaerner’s market opportunities.
There is high activity for positioning and bidding for new contracts especially within Renewables. Order intake in the second quarter was around NOK 3.3 billion, including new contracts and orders for additional scope in ongoing projects.
Demobilisation of hired-in project resources at the yards had a negative cost impact as communicated in Q1 2020. During the second quarter Norwegian authorities have started to allow foreign hired-in personnel to travel to Norway. As Kvaerner’s priority is always HSSE, a stepwise remobilisation of hired-ins is used to ensure control. Remobilisation of hired-in personnel started in May and will continue though the autumn. Offices are again opened for normalised operations, but some corona related precautions remain in place.

ENDS
For further information, please contact:

Media inquiries:
Torbjørn Andersen, Vice President, IR & Communications, Kvaerner, Tel: +47 928 85 542, email: torbjorn.andersen@kvaerner.com

Investor Relations:
Idar Eikrem, EVP & CFO, Kvaerner, +Mob: +47 950 28 363, email: ir@kvaerner.com

About Kvaerner:
Kvaerner is a project execution specialist and a trusted advisor for our clients. We provide engineering, procurement and construction (EPC) services and deliver advanced offshore and onshore installations around the world.
We have offices in seven countries and approximately 2 800 employees. Health, Safety, Security and Environment (HSSE) has the highest priority in our work, and we aim to deliver technology and solutions in a safe and sustainable way. Our passion, experience and expertise realise values for clients and societies. Kværner ASA, through its subsidiaries and affiliates (“Kvaerner”), is an international contractor and preferred partner for operators and contractors within oil and gas, renewable energy and in the field of engineering and fabrication.

In 2019, Kvaerner’s Field Development segment had consolidated annual revenues of NOK 9.4 billion and the company reported an order backlog at 31 March 2020 of NOK 7.2 billion. Kvaerner is publicly listed with the ticker “KVAER” at the Oslo Stock Exchange. For further information, please visit www.kvaerner.com (http://www.kvaerner.com).

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