14 July 2016 - Improved operations - higher margins. Kvaerner increased the adjusted EBITDA margin to 5.7 percent for the second quarter. This is up from 3.5 percent in the corresponding period last year, and up from 4.8 percent in the first quarter this year. - We have focused on delivering predictably while we are continuously improving productivity and costs. This is contributing positively to our financial results, says Kvaerner`s President & CEO Jan Arve Haugan.
Kvaerner has over the last years worked intensely to improve costs, quality, productivity and competitiveness. These efforts are now yielding results on the current portfolio of projects. Many of Kvaerner`s contracts include bonuses and incentives related to good performance and for meeting key milestones, in particular towards the end of the projects.
"We expect that improved performance in the on-going projects will have positive impact on the results over the next quarters. We anticipate that the EBITDA margin for the second half of 2016 and for the full year 2016 to be higher than in the corresponding periods last year", says Haugan.
Total revenues, including jointly controlled entities (Field Development segment) in the past quarter amounted to NOK 2 475 million compared to NOK 3 794 million in the corresponding quarter 2015. Total revenues, including jointly controlled entities after the first six months this year were NOK 5 260 million versus NOK 7 967 million at the same time last year. The corresponding EBITDA for the first half year was NOK 245 million both in 2016 and 2015. The higher EBITDA margin reflects the improved performance.
As of 30 June 2016, the order backlog amounted to NOK 10 172 million, while it was NOK 12 054 million after the first quarter 2016.
For the second half of 2016, Kvaerner expects some few projects in relevant segments to come up for contract award. Competition remains fierce, but Kvaerner`s improvement initiatives over the last years has increased competitiveness. Kvaerner is positioning for new prospects with expected awards in 2016, 2017 and 2018, both in the Norwegian market and in other targeted regions.
Kvaerner is debt free, and has more than NOK 2.4 billion in net cash. This reflects a net increase in cash and bank deposits during the second quarter of NOK 325 million.
"Winning new contracts to secure a sound activity level also in the next years is a priority for us. The market may during the coming year start a careful development in a somewhat more positive direction. Clients demand that contractors must demonstrate both ability to deliver predictably and a sufficient economic robustness. Kvaerner`s solid financial position is a competitive lever in the positioning for new contracts. It also provides flexibility to pursue selected opportunities for strategic development in connection with the ongoing market shift", says Jan Arve Haugan.