Norwegian engineering and construction firm Kvaerner says it has a healthy backlog but that there are few opportunities for new contracts in 2016 and 2017 looks uncertain.
The firm, which only posted a relatively small drop in revenues in 2015, said it is dropping its dividend in 1H 2016 as it looks to maintain a "resilient" balance sheet through the down turn. Revenues were NOK 12 billion, down from NOK 13.9 billion in 2014.
The firm says it has a "good" order backlog of NOK 14.3 billion at 31 December, giving it a sound starting point for the activity level through 2016, but this is down from NOK 16.2 billion the previous quarter, and NOK 16.5 billion at the end of 2014.
The firm is also looking to reduce its overheads by 20% through 2015 and 2016, to make it more competitive in the "challenging market."
"Last year, we were awarded almost 90% of the contract values for platform substructures to Johan Sverdrup," says the firm. "In a competitive joint venture with KBR, we were awarded one of the largest topside contracts in the market last year, for the utility and living quarter platform at Johan Sverdrup."
"For 2016, we see some few opportunities for new contracts of moderate size. Simultaneously, we see that the timing of key decisions is uncertain. This makes it difficult to predict the activity level in 2017, but our order backlog provides a good starting point for our operations in the current year and the next," says Jan Arve Haugan, President and CEO.
"Through last year including the fourth quarter, Kvaerner managed to maintain a good activity level, and the productivity has developed positively in several areas. We are continuing to meet all key milestones in our project portfolio, and we were proud to contribute to first oil on the new Edvard Grieg platform in late November," added Haugen.
Subscribe
