Kvaerner Group Reports Further Progress - First Quarter Results

Apr 24, 2001, 01:00 ET from Kvaerner

    LONDON, April 24 /PRNewswire/ -- Kvaerner, the Anglo-Norwegian engineering
 and construction Group, today announced its results for the three months
 ending 31 March, 2001.  Pre-tax profit for the period amounted to
 NOK 151 million; the operating profit was NOK 261 million; and turnover
 totalled NOK 10.5 billion.
 
     HIGHLIGHTS
     * Profit before tax for the first quarter amounted to NOK 151 million
       (2000: NOK 10 million) representing a positive swing of NOK 141 million
       from the first quarter 2000.  Compared to the previous quarter
       (NOK 80 million, excluding exceptional items) the improvement was
       NOK 71 million.
 
     * Group operating profit for the first quarter amounted to NOK
       261 million, (2000: NOK 189 million, excluding Construction)
       representing a NOK 72 million improvement over the first quarter 2000,
       and NOK 36 million when compared to the fourth quarter 2000.
 
     * Operating margin improved to 2.5 per cent, against 1.8 per cent in the
       first quarter last year, and 1.9 per cent in the previous quarter.
 
     * Group turnover for the period amounted to NOK 10.5 billion -- which is
       on a par with the same period last year (adjusted for the sale of
       Construction).
 
     * Order intake for the Group during the first quarter of NOK 8.5 billion
       is largely in line with the previous quarter, with the order reserve
       standing at NOK 48.3 billion -- a reduction of NOK 2.8 billion since the
       year-end.
 
     * For the core businesses combined, the operating profit in the first
       quarter amounted to NOK 213 million (2000: NOK 118 million).  This is
       slightly below the previous quarter (NOK 223 million).
 
     * The Oil & Gas result significantly improved with an operating profit of
       NOK 96 million in the first quarter, compared with NOK 6 million for the
       same period last year, and NOK 57 million in the fourth quarter of 2000;
       E&C's result was NOK 117 million, against NOK 166 million in the fourth
       quarter, in light of the reduced turnover.
 
     * Operating margin continued to improve and was 3.5 per cent in the
       reporting period, against 2.8 per cent the previous quarter, and 1.8 per
       cent in the first quarter of 2000.
 
     * The core business order intake in the first quarter was NOK 6.7 billion.
 
     * The order reserve for the core business remained at the same level as
       the year-end.
 
     GROUP RESULTS AT A GLANCE
 
     NOK millions                    1Q 2001          1Q2000        YR2000
 
     Turnover                         10,498          14,213        54,472
     Operating profit                    261             259         1,243
     Profit before tax                   151              10           513
     Order intake                      8,454          11,969*       54,845
     Order reserve/ end of period     48,310          39,535        51,122
 
     *Excluding Construction
 
     The Group operating result for the first quarter was a profit of NOK
 261 million (2000: NOK 189 million, adjusted for the sale of Construction).
 The first quarter operating profit for the core businesses, E&C (Engineering &
 Construction) and Oil & Gas, amounted to NOK 213 million, which represents an
 improvement of NOK 99 million over the same period in 2000.  E&C's operating
 profit of NOK 117 million was a slight improvement over the first quarter
 result in 2000, and the profit in Oil & Gas represents a NOK 90 million
 improvement over the comparable result last year of NOK 6 million.  The first
 quarter operating profit for Other Businesses amounted to NOK 48 million.
     Group turnover for the first quarter amounted to NOK 10.5 billion (2000:
 NOK 10.9 billion, excluding Construction).
     After net financial items of NOK 110 million in the first quarter, the
 profit before tax amounted to NOK 151 million, which compares with the figure
 of NOK 10 million for the same period last year.
 
     ORDER INTAKE AND RESERVE
     For the Group as a whole, the order intake of NOK 8.5 billion is largely
 in line with the position in the previous quarter, whilst NOK 3.5 billion
 lower than the comparable period last year (excluding Construction).  Last
 year's first quarter order intake was influenced by particularly strong
 figures from E&C and Shipbuilding.  The combined order intake for E&C and Oil
 & Gas during the first quarter this year amounted to NOK 6.7 billion.
     At the end of the quarter, the order reserve for the Group as a whole
 stood at NOK 48.3 billion, representing an increase of NOK 8.8 billion when
 compared to the position at the end of the first quarter 2000, excluding
 Construction.  Although slightly lower than the position at the year-end 2000,
 this is largely attributable to run-off of the strong order reserve built-up
 in Shipbuilding during last year.
 
     OPERATIONAL IMPROVEMENTS
     Indirect overhead costs for the quarter in the core business areas and
 corporate functions showed a reduction of 8 per cent compared to the
 corresponding amount last year.
 
     CORE BUSINESS RESULTS
 
     E&C
     NOK millions                    1Q 2001          1Q2000        YR2000
 
     Turnover                          3,527           3,576        16,407
     Operating profit                    117             108           508
     Order intake                      2,879           5,608        17,159
     Order reserve/ end of period     11,470          13,894        12,052
 
     The operating profit for the period was NOK 117 million and represents a
 17 per cent improvement over the first quarter of 2000 (excluding the
 Hydrocarbons activity, now transferred to Oil & Gas).  All major business
 streams were profitable in the period, the largest contributors to the result
 being Process, Technology, and Construction.  A weaker result from the Metals
 business stream was mainly attributable to a downturn in the North American
 steel market.
     At 3.3 per cent, operating margins have continued to improve, compared to
 3.0 per cent for the first quarter of 2000 and 3.1 per cent in the fourth
 quarter.
     Order intake for the period amounted to NOK 2.9 billion, against NOK
 3.8 billion in the fourth quarter, reflecting a weakening in some markets due
 to the overall slow-down in the U.S. economy.  The order reserve at the end of
 the quarter stood at NOK 11.5 billion, which is broadly on a par with the
 year-end position (NOK 12.1 billion).
 
     Oil & Gas
     NOK millions                    1Q 2001          1Q2000        YR2000
 
     Turnover                          2,514           3,122        11,304
     Operating profit                     96               6           148
     Order intake                      3,849           2,186        12,394
     Order reserve/ end of period     10,214           6,665         8,969
 
     The operating result for the first quarter was a profit of NOK 96 million,
 exceeding the comparable figure last year by NOK 90 million.  This result is
 mainly attributable to a good result in the Field Development business stream.
 Oilfield Products again showed a consistently positive performance.
     Operating margins improved from 2.2 per cent in the previous quarter to
 3.8 per cent in the first quarter 2001.
     Order intake for the quarter was higher than anticipated at NOK
 3.8 billion (2000: NOK 2.2 billion).  The largest order secured was for the
 utility and living quarters modules for Grane.  At the end of the quarter, the
 order reserve stood at NOK 10.2 billion, an improvement of NOK 1.2 billion
 over the year-end position, and NOK 3.5 billion higher than last year.  All
 operating units improved their future work-load compared to the previous
 quarter.
 
     OTHER BUSINESSES
     The first quarter out-turn for Other Businesses (including Shipbuilding,
 Pulp & Paper and other remaining activities), was an operating profit of NOK
 48 million, compared to NOK 2 million in the previous quarter.
     Shipbuilding:  The operating result for the quarter was a profit of NOK
 59 million, against a loss of NOK 42 million in the previous quarter.  A
 satisfactory result from Masa-Yards in Finland was offset by losses incurred
 at the new Philadelphia yard in the USA, where the first ship is now being
 built.  The Warnow result reflects a lack of contribution from the production
 of a drilling rig for Stena, due for completion at the end of July.
     At Masa-Yards, the 85,700 GT cruise ship 'Carnival Spirit' was delivered
 on schedule in early April, and the third of five giant "Voyager"-class cruise
 ships for Royal Caribbean is on schedule for delivery later this year.
     Pulp & Paper:  The operating profit for the first quarter was NOK
 14 million (2000: NOK 18 million).  The main contributors to this result were
 the Power division and the Fiberline division.
     Order intake during the quarter was NOK 1.2 billion (2000: NOK
 764 million), contributing to a satisfactory order reserve of NOK 3.5 billion,
 comparable to both the position for the first quarter 2000, and for the last
 year-end.
     Other activities:  The combined result for these discontinuing businesses
 in the quarter, which includes the mechanical fabrication activities in
 Romania, was a loss of NOK 25 million.  As previously reported, it is expected
 that this position will gradually improve during the year, as a result of
 margin improvements and activity reduction.
 
     INVESTMENT, FINANCING AND LIQUIDITY
     Cash, bank deposits and debt: Net interest-bearing liabilities at the end
 of the first quarter amounted to NOK 6.1 billion, which is an increase of NOK
 0.7 billion since the year-end, due to the build-up of work in progress within
 Shipbuilding in anticipation of an April delivery.  The vessel was delivered
 as scheduled and NOK 850 million was received in net proceeds.  For the year
 as a whole, net-interest bearing debt is expected to further reduce
 significantly, following the trend of the previous two years.
     The Group received cash proceeds of almost NOK 1.2 billion from the sale
 of the Baltic Exchange early in the first quarter.  Net working capital at the
 end of the first quarter amounted to NOK 4.8 billion, compared to NOK
 4.2 billion at the end of the previous quarter.  Cash flow in the first
 quarter before financing was negative at NOK 678 million.
     Negotiations were completed with lenders in the first quarter for a new
 financing facility of US$ 450 million.  This is now in place and the major
 facility due for repayment in 2001 has now been cancelled.
 
     Notes:
     * NOK = Norwegian Kroner;  US$/NOK - .9.0;  UK pound/NOK - 13.0;
       EUR /NOK - 8.1
 
     * Kvaerner is a world-class Anglo-Norwegian engineering and construction
       group.  The Group's activities are organised in two core business areas:
       E&C (engineering and construction), and Oil & Gas.  It also has
       interests in shipbuilding and the provision of services to the pulping
       industry.  Kvaerner is a Norwegian registered business, but has a
       London, UK-based international headquarters.  The Group has annual
       revenues of more than US$6 billion, with some 35,000 permanent staff
       located in almost 35 countries throughout Europe, Asia and the Americas.
 
 

SOURCE Kvaerner
    LONDON, April 24 /PRNewswire/ -- Kvaerner, the Anglo-Norwegian engineering
 and construction Group, today announced its results for the three months
 ending 31 March, 2001.  Pre-tax profit for the period amounted to
 NOK 151 million; the operating profit was NOK 261 million; and turnover
 totalled NOK 10.5 billion.
 
     HIGHLIGHTS
     * Profit before tax for the first quarter amounted to NOK 151 million
       (2000: NOK 10 million) representing a positive swing of NOK 141 million
       from the first quarter 2000.  Compared to the previous quarter
       (NOK 80 million, excluding exceptional items) the improvement was
       NOK 71 million.
 
     * Group operating profit for the first quarter amounted to NOK
       261 million, (2000: NOK 189 million, excluding Construction)
       representing a NOK 72 million improvement over the first quarter 2000,
       and NOK 36 million when compared to the fourth quarter 2000.
 
     * Operating margin improved to 2.5 per cent, against 1.8 per cent in the
       first quarter last year, and 1.9 per cent in the previous quarter.
 
     * Group turnover for the period amounted to NOK 10.5 billion -- which is
       on a par with the same period last year (adjusted for the sale of
       Construction).
 
     * Order intake for the Group during the first quarter of NOK 8.5 billion
       is largely in line with the previous quarter, with the order reserve
       standing at NOK 48.3 billion -- a reduction of NOK 2.8 billion since the
       year-end.
 
     * For the core businesses combined, the operating profit in the first
       quarter amounted to NOK 213 million (2000: NOK 118 million).  This is
       slightly below the previous quarter (NOK 223 million).
 
     * The Oil & Gas result significantly improved with an operating profit of
       NOK 96 million in the first quarter, compared with NOK 6 million for the
       same period last year, and NOK 57 million in the fourth quarter of 2000;
       E&C's result was NOK 117 million, against NOK 166 million in the fourth
       quarter, in light of the reduced turnover.
 
     * Operating margin continued to improve and was 3.5 per cent in the
       reporting period, against 2.8 per cent the previous quarter, and 1.8 per
       cent in the first quarter of 2000.
 
     * The core business order intake in the first quarter was NOK 6.7 billion.
 
     * The order reserve for the core business remained at the same level as
       the year-end.
 
     GROUP RESULTS AT A GLANCE
 
     NOK millions                    1Q 2001          1Q2000        YR2000
 
     Turnover                         10,498          14,213        54,472
     Operating profit                    261             259         1,243
     Profit before tax                   151              10           513
     Order intake                      8,454          11,969*       54,845
     Order reserve/ end of period     48,310          39,535        51,122
 
     *Excluding Construction
 
     The Group operating result for the first quarter was a profit of NOK
 261 million (2000: NOK 189 million, adjusted for the sale of Construction).
 The first quarter operating profit for the core businesses, E&C (Engineering &
 Construction) and Oil & Gas, amounted to NOK 213 million, which represents an
 improvement of NOK 99 million over the same period in 2000.  E&C's operating
 profit of NOK 117 million was a slight improvement over the first quarter
 result in 2000, and the profit in Oil & Gas represents a NOK 90 million
 improvement over the comparable result last year of NOK 6 million.  The first
 quarter operating profit for Other Businesses amounted to NOK 48 million.
     Group turnover for the first quarter amounted to NOK 10.5 billion (2000:
 NOK 10.9 billion, excluding Construction).
     After net financial items of NOK 110 million in the first quarter, the
 profit before tax amounted to NOK 151 million, which compares with the figure
 of NOK 10 million for the same period last year.
 
     ORDER INTAKE AND RESERVE
     For the Group as a whole, the order intake of NOK 8.5 billion is largely
 in line with the position in the previous quarter, whilst NOK 3.5 billion
 lower than the comparable period last year (excluding Construction).  Last
 year's first quarter order intake was influenced by particularly strong
 figures from E&C and Shipbuilding.  The combined order intake for E&C and Oil
 & Gas during the first quarter this year amounted to NOK 6.7 billion.
     At the end of the quarter, the order reserve for the Group as a whole
 stood at NOK 48.3 billion, representing an increase of NOK 8.8 billion when
 compared to the position at the end of the first quarter 2000, excluding
 Construction.  Although slightly lower than the position at the year-end 2000,
 this is largely attributable to run-off of the strong order reserve built-up
 in Shipbuilding during last year.
 
     OPERATIONAL IMPROVEMENTS
     Indirect overhead costs for the quarter in the core business areas and
 corporate functions showed a reduction of 8 per cent compared to the
 corresponding amount last year.
 
     CORE BUSINESS RESULTS
 
     E&C
     NOK millions                    1Q 2001          1Q2000        YR2000
 
     Turnover                          3,527           3,576        16,407
     Operating profit                    117             108           508
     Order intake                      2,879           5,608        17,159
     Order reserve/ end of period     11,470          13,894        12,052
 
     The operating profit for the period was NOK 117 million and represents a
 17 per cent improvement over the first quarter of 2000 (excluding the
 Hydrocarbons activity, now transferred to Oil & Gas).  All major business
 streams were profitable in the period, the largest contributors to the result
 being Process, Technology, and Construction.  A weaker result from the Metals
 business stream was mainly attributable to a downturn in the North American
 steel market.
     At 3.3 per cent, operating margins have continued to improve, compared to
 3.0 per cent for the first quarter of 2000 and 3.1 per cent in the fourth
 quarter.
     Order intake for the period amounted to NOK 2.9 billion, against NOK
 3.8 billion in the fourth quarter, reflecting a weakening in some markets due
 to the overall slow-down in the U.S. economy.  The order reserve at the end of
 the quarter stood at NOK 11.5 billion, which is broadly on a par with the
 year-end position (NOK 12.1 billion).
 
     Oil & Gas
     NOK millions                    1Q 2001          1Q2000        YR2000
 
     Turnover                          2,514           3,122        11,304
     Operating profit                     96               6           148
     Order intake                      3,849           2,186        12,394
     Order reserve/ end of period     10,214           6,665         8,969
 
     The operating result for the first quarter was a profit of NOK 96 million,
 exceeding the comparable figure last year by NOK 90 million.  This result is
 mainly attributable to a good result in the Field Development business stream.
 Oilfield Products again showed a consistently positive performance.
     Operating margins improved from 2.2 per cent in the previous quarter to
 3.8 per cent in the first quarter 2001.
     Order intake for the quarter was higher than anticipated at NOK
 3.8 billion (2000: NOK 2.2 billion).  The largest order secured was for the
 utility and living quarters modules for Grane.  At the end of the quarter, the
 order reserve stood at NOK 10.2 billion, an improvement of NOK 1.2 billion
 over the year-end position, and NOK 3.5 billion higher than last year.  All
 operating units improved their future work-load compared to the previous
 quarter.
 
     OTHER BUSINESSES
     The first quarter out-turn for Other Businesses (including Shipbuilding,
 Pulp & Paper and other remaining activities), was an operating profit of NOK
 48 million, compared to NOK 2 million in the previous quarter.
     Shipbuilding:  The operating result for the quarter was a profit of NOK
 59 million, against a loss of NOK 42 million in the previous quarter.  A
 satisfactory result from Masa-Yards in Finland was offset by losses incurred
 at the new Philadelphia yard in the USA, where the first ship is now being
 built.  The Warnow result reflects a lack of contribution from the production
 of a drilling rig for Stena, due for completion at the end of July.
     At Masa-Yards, the 85,700 GT cruise ship 'Carnival Spirit' was delivered
 on schedule in early April, and the third of five giant "Voyager"-class cruise
 ships for Royal Caribbean is on schedule for delivery later this year.
     Pulp & Paper:  The operating profit for the first quarter was NOK
 14 million (2000: NOK 18 million).  The main contributors to this result were
 the Power division and the Fiberline division.
     Order intake during the quarter was NOK 1.2 billion (2000: NOK
 764 million), contributing to a satisfactory order reserve of NOK 3.5 billion,
 comparable to both the position for the first quarter 2000, and for the last
 year-end.
     Other activities:  The combined result for these discontinuing businesses
 in the quarter, which includes the mechanical fabrication activities in
 Romania, was a loss of NOK 25 million.  As previously reported, it is expected
 that this position will gradually improve during the year, as a result of
 margin improvements and activity reduction.
 
     INVESTMENT, FINANCING AND LIQUIDITY
     Cash, bank deposits and debt: Net interest-bearing liabilities at the end
 of the first quarter amounted to NOK 6.1 billion, which is an increase of NOK
 0.7 billion since the year-end, due to the build-up of work in progress within
 Shipbuilding in anticipation of an April delivery.  The vessel was delivered
 as scheduled and NOK 850 million was received in net proceeds.  For the year
 as a whole, net-interest bearing debt is expected to further reduce
 significantly, following the trend of the previous two years.
     The Group received cash proceeds of almost NOK 1.2 billion from the sale
 of the Baltic Exchange early in the first quarter.  Net working capital at the
 end of the first quarter amounted to NOK 4.8 billion, compared to NOK
 4.2 billion at the end of the previous quarter.  Cash flow in the first
 quarter before financing was negative at NOK 678 million.
     Negotiations were completed with lenders in the first quarter for a new
 financing facility of US$ 450 million.  This is now in place and the major
 facility due for repayment in 2001 has now been cancelled.
 
     Notes:
     * NOK = Norwegian Kroner;  US$/NOK - .9.0;  UK pound/NOK - 13.0;
       EUR /NOK - 8.1
 
     * Kvaerner is a world-class Anglo-Norwegian engineering and construction
       group.  The Group's activities are organised in two core business areas:
       E&C (engineering and construction), and Oil & Gas.  It also has
       interests in shipbuilding and the provision of services to the pulping
       industry.  Kvaerner is a Norwegian registered business, but has a
       London, UK-based international headquarters.  The Group has annual
       revenues of more than US$6 billion, with some 35,000 permanent staff
       located in almost 35 countries throughout Europe, Asia and the Americas.
 
 SOURCE  Kvaerner