July 6, 2007
Aker Yards revises earnings forecast
Citing "challenges in the three Finnish yards, mainly related to the ferry projects," Aker Yards is revising its earnings forecasts.
Project estimates have been revised, and the operating results for the second quarter and for 2007 will be lower.
At the same time, Aker Yards is announcing divestments that allow for a sustainable payment of dividend to shareholders for 2007.
The EBITDA figure for Aker Yards for 2007 is estimated to be about NOK 1,000--1,100 million, and the net profit estimated about NOK 800-900 million.
As a result of the revised cost estimates, the EBITDA margin is estimated to be in the range of 5- 6 percent in 2008. The long term target of 7 percent is maintained.
For the Business area Cruise & Ferries in 2007, the EBITDA margin is expected to be approximately 2.5 - 3 percent. Operating revenues in 2007 are expected to be approximately NOK 35 billion.
Sales of assets in the second quarter will have a positive effect, contributing to an estimated net result for Aker Yards in 2007 of NOK 800-900 million.
Aker Yards' shares in Aker Invest and Aker Oilfield Services have been sold to Aker Capital, a wholly owned subsidiary of Aker ASA, at a profit of approximately NOK 260 million, which reflects a substantial growth in shareholder value during the past few years.
Aker Yards says the main reason for the revised estimates lies in the heavy load in the Finnish operations, and is mainly related to the building of ferries. The very high level of growth in activity level at the same time as the market is booming has led to a lack of resources giving a knock-on effect on the total backlog of ferries. The number of ferries in the backlog in Finland is seven, of which five will be delivered in the next 12 months. In addition, the suppliers of the shipyards are also experiencing a booming market, leading to higher prices than anticipated. This is giving a negative effect on most of the backlog in the business area Cruise & Ferries.
Yrjö: Julin, who was appointed President and CEO on June 11, 2007 states in a comment: "We have decided it is correct to revise project estimates, primarily related to ferries based on the cost increases we see in the suppliers market, our tight delivery schedule, as well as the general high activity level in all areas of the value chain."
Julin continues "I am not pleased by having to bring this news to the market. We take this matter very seriously, and will dedicate ourselves fully to improve the situation. However, I am convinced we have a good foundation for improvements, and that the entire organization will pull together to make this work. We have identified a set of immediate actions in order to rectify the situation, and the operating model in Finland will be re-evaluated, and a new structure will be in place soon."
The second quarter results release for 2007 has been postponed to August 24, 2007 at 0830.