Aker reports signs of improvement

Company News - May 8, 2000

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Aker Maritime says that, as anticipated the weak market for products and services related in the offshore oil and gas sector continued to affect the group in the first quarter the year.

Group profit after financial items in the period was NOK 33 million (compared to NOK 72 million in the first quarter of 1999). The operating profit includes NOK 151 million resulting from transactions in connection with the change of ownership in Aker'sAker Base subsidiary.

Adjusted for these one-off items, Aker Maritime's operating loss in the first quarter was NOK 90 million. In the first quarter this year, group revenues were down 38 per cent, compared to the corresponding months in 1999.

Profits were down in all business areas, and two issues stand out in particular. One is low revenue from marine operations in the Gulf of Mexico, reflecting a weak market, while earnings have also been low at Aker Geo.

With the addition of a second new vessel, the financial performance of Aker Geo is expected to improve from the second quarter, however.

Several important markets for Aker Maritime are now showing clear signs of improvement, says the company. Bid activity for field development projects is high. But even though major contracts are likely to be confirmed shortly, a significant improvement in group profits is not expected until the third quarter of this year.

At the end of March, Aker Maritime's order backlog was NOK 7.3 billion, compared with NOK 8.2 billion at the beginning of the year.

Several important orders have been confirmed so far this year. Aker Maritime was awarded the contract for marine operations on the Bayu-Undan field in Australia, whilst in Norway, Aker Maritime will make changes to BP Amoco's Gyda platform to allow it toreceive crude from the nearby Tambar field, while Norske Shell has awarded Aker Maritime a field service contract to Aker Maritime.

Several orders for drilling and marine equipment and mooring systems have been placed recently.

At the end of March there were 11,344 employees in the company, compared with 12,187 three months earlier. In the same period the number of employees outside Norway fell from 3,715 to 3,507.

Overall, says Aker Maritime, the group's financial situation is improving further.

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