Aker Kværner ASA 4th quarter and preliminary annual results 2007

Transcription

1 Aker Kværner ASA 4th quarter and preliminary annual results February 2008 part of Aker

2 Best year ever Group financials Full year consolidated revenues of NOK million represented an increase of 15 percent compared to This increase was due mainly to good markets and high activity in all business areas. Fourth quarter consolidated revenues amounted to NOK million, slightly lower compared with NOK million for the same period in The main reason for this reduction was the successful completion of the Ormen Lange and Snøhvit projects in the third quarter EBITDA of NOK million for the year showed an increase of 36 percent from NOK million in 2006, which gave a margin increase from 5.7 percent to 6.8 percent. EBITDA in the fourth quarter of 2007 was NOK million compared to NOK 786 million in the fourth quarter of 2006, an increase of 36 percent. The EBITDA margin for the fourth quarter 2007 was 7.2 percent compared to 5.1 percent in the same period in Depreciation in the fourth quarter was approximately NOK 60 million higher than levels in the past, primarily due to items connected to one-off write downs of fixed assets at Aker Kvaerner Verdal. NOK 1.6 billion was booked as capital expenditure in 2007 compared to NOK 971 million in The main investments are related to the high-tech manufacturing centre in Malaysia and capacity expansion within the subsea and P&T business areas. Net financial expenses for the fourth quarter were NOK 18 million, a reduction from NOK 653 million for the same period in This reflected a favourable financial position after the refinancing of the company in December Net financial expenses for 2007 were NOK 106 million. Fluctuations in the fair value of hedging transactions which did not qualify for hedge accounting represented an accounting loss under financial items of NOK 2 million in the fourth quarter and a gain of NOK 162 million for the year. EBITDA was negatively affected by NOK 23 million in the quarter and negatively by NOK 68 million for the year from hedging positions not qualifying for hedge accounting. Pre-tax profit for the fourth quarter 2007 was NOK 880 million compared to NOK 88 million for the same period in Pretax profit for 2007 was NOK million compared to NOK million in Tax expenses for the fourth quarter were NOK 255 million, which was 29 percent of profit before tax. Tax expenses for the year were NOK million, or 30 percent of profit before tax, while payable tax was 16 percent of profit before tax. Net profit for the fourth quarter was NOK 625 million, giving earnings per share of NOK Cash flow from operating activities was NOK million in the fourth quarter and NOK for the year This reflects a NOK million decrease in net current operating assets, from NOK million at the end of third quarter to negative NOK million at the end of the year. Cash and bank deposits at the end of the year were NOK 3.5 billion, an increase of NOK 1.3 billion during the fourth quarter. Undrawn committed long-term bank revolving credit facilities amounted to NOK 6 billion, giving a total liquidity buffer of NOK 9.5 billion. Gross interest-bearing debt amounted to NOK 2.0 billion at the end of the year, a decrease of NOK 0.9 billion during the fourth quarter. Net interest bearing items were NOK 2.1 billion. Order intake in the fourth quarter was NOK 13.3 billion. At the end of the year, order backlog was NOK 58.3 billion, a decrease of NOK1 billion from the third quarter 2007 and a NOK 1.4 billion decrease from the end of Order intake represents both new contracts and growth in existing contracts. Equity ratio at year end was 25.5 percent, an increase from 23.8 percent at the end of the third quarter As reported in the second quarter 2007, Aker Kvaerner has initiated multiple improvement programmes in order to strengthen its competitiveness. The ambition is to improve our cost position by more than NOK 1 billion over the next two to three years. Initiatives to achieve these results gained momentum, with approximately NOK 280 million saving by the end of the year. Key figures Amounts in NOK mill. 4Q07 4Q06 1Q07 2Q07 3Q Operating revenues EBITDA ² EBITDA margin (%) EBIT Net profit EPS¹ Order intake Order backlog Net current operating assets Net debt Basic and diluted EPS continuing operations 2 Inclusive sales gain of NOK 87 million 2008 Aker Kværner ASA Page 1 of 8 4th Quarter Report

3 The Aker Kvaerner share During the fourth quarter 2007, Aker Kvaerner announced a buy-back of own shares, for a consideration of NOK 150 million. A further shares have been bought back so far in 2008, for a consideration of NOK 70 million. Aker Kvaerner currently holds of the company s outstanding shares, or 1.81 percent.. The share price decreased from NOK at the end of the third quarter to NOK at the end of the year. This decrease of 19 percent represents a decrease in value of NOK 7.5 billion for the shareholders of Aker Kvaerner. Total market value was NOK 39.6 billion at the end of the year 2007 compared to NOK 42.6 billion at the end of the year From 1st January 2008, new environmental improvement KPIs will be implemented in Aker Kvaerner. These KPIs will include energy use, energy intensity, emissions, emissions intensity, waste and recycling factors. These KPIs will be added to Aker Kvaerner s total environmental programme. Lost Time Incident Frequency (LTIF) is at 0.7 for the fourth quarter and for 2007 overall. The Total Recordable Incident Frequency (TRIF) is at 2.9 for the quarter and 3.7 for 2007 as a whole. Sick leave is at 2.7 percent for the fourth quarter, compared to 2.3 percent in the fourth quarter of Lost Time Incidents per million hours (LTIF) 3 Total Recordable Incidents per million hours (TRIF) Field Development (FD) Board proposal to annual general meeting At the Ordinary Annual General Meeting of Aker Kvaerner ASA, taking place on 3 April 2008, the Board of Directors will propose the following: 1. Ordinary dividend: to pay an ordinary dividend of NOK 3 per share, in total NOK 822 million. 2. Aker Kvaerner ASA to change name to Aker Solutions ASA Status of operations Health, Safety and Environment Aker Kvaerner s strong focus and efforts within Health, Safety and the Environment (HSE) continue with Just Care as a symbol of the company s HSE culture and as an umbrella for our HSE programmes. We see a further improvement in the total recordable incident rate, while the lost time incident and sick leave rates are slightly up for the quarter. Training continues to receive a high degree of focus. To date 1700 leaders have graduated from Aker Kvaerner s own HSE leadership programme, and in total over individual training sessions have been performed with the Just Care, stress management and HSE risk assessment elearning modules. 3 new modules - travel HSE, environment and office HSE - will be launched in Q1 and Q2 of A key initiative is the development of company-wide safety rules for specific activities such as lifting, working at height, energy isolation, confined space entry, excavation and using mobile equipment. The objective of these Just Rules is to reduce still further the number of serious incidents involving Aker Kvaerner people. They will be rolled out in Q Operating revenues EBITDA Order intake Order backlog Employees FD reported lower revenues in the fourth quarter 2007 compared with the same period in The main reason was the successful completion of the Ormen Lange and Snøhvit projects in the third quarter FD enjoyed high activity in 2007 as a whole, especially as a result of work on projects such as Snøhvit and Ormen Lange, but also as a result of the Adriatic LNG terminal and the H-6e drilling rigs. The completion of the Ormen Lange and Snøhvit projects will contribute to a somewhat lower level of activity in 2008 than in Fourth quarter EBITDA was NOK 203 million, compared with NOK 242 million for the fourth quarter The EBITDA margin in the fourth quarter was 6.4 percent, and 5.4 percent for the year. The full year EBITDA for 2007 was in line with the EBITDA for Growth in existing contracts and some smaller new contracts were booked in the fourth quarter. Tender activity is high. The Gjøa (semisubmersible) project and the Skarv (FPSO) projects have reached important milestones. The order backlog consists of a number of contracts with deliveries from 2008 to 2011 and forms a solid foundation for the future. The hull and topsides for the first of the two Aker H-6e drilling rigs for Aker Drilling, Aker Spitsbergen, were mated at the Stord yard in November. The schedule for delivering these two drilling rigs has been extended from April to July 2008 and from October to December 2008 respectively. The new timeline is caused by delays in work from subcontractors with more subsequent carry-over work to the later project phases, and to increases in the scope of our engineering work over what was originally planned Aker Kværner ASA Page 2 of 8 4th Quarter 2007 Report

4 FD s goal is to extend their position in their selected market segments. Their leadership in Norway will be maintained. Aker Kvaerner s development as an attractive partner in Russia and the Caspian Sea will be continued. We will strengthen our activities on the UK continental shelf and in the deepwater areas of the Gulf of Mexico. South-east Asia is another priority. Key markets are expected to remain strong. Maintenance, Modifications and Operations (MMO) Operating revenues EBITDA Order intake Order backlog Employees Operating revenues were 19 percent lower in the fourth quarter 2007 compared to the corresponding period in The main reason for this variation was the successful completion of the Ormen Lange and Snøhvit projects in the third quarter Revenues for 2007 were in line with revenues for Fourth quarter EBITDA increased by 5 percent compared to the corresponding quarter in The full year EBITDA for 2007 was 17 percent higher than for EBITDA margin in the fourth quarter was 5.5 percent, compared to 4.2 percent in the same quarter in 2006, due to improved performance on projects including long-term contracts in the North Sea. EBITDA margin for the year 2007 was 5.4 percent compared to 4.7 percent in The Frigg Cessation Project is a pioneer project for decommissioning larger fields in the North Sea. It is challenging in execution, environmental and safety issues. Together with the client, Total, we have managed to perform all planned activities on the Frigg Field Centre, meeting the challenges of utilising new technology in extreme weather conditions. There has been continued growth in technology and specialist services and good performance in the maintenance and modification portfolio. Bidding activity is high. Several projects are in the bid phase in the North Sea and are expected to be awarded during the first half of Growth in existing contracts and some new smaller and medium sized contracts were booked in the fourth quarter: Husky Operations Limited has awarded AKCS Offshore Partner the EPC and maintenance support services contract in connection with the production and operations of the White Rose field. The contract is valued at approximately CAN$75 million for a period of five years, with options for renewals for fifteen successive periods of one year each. AKCS Offshore Partner consists of Aker Kvaerner Offshore Partner AS (40%), SNC-Lavalin Inc. (40%) and G.J. Cahill and Company Limited (20%). Carefully planned maintenance and improved efficiency are two of the most important measures for increasing productivity and the production lifetime of offshore oil and gas infrastructure and land-based processing plants. Longer lifetimes for installations, reduced downtime and more efficient operations lead to greater value creation for customers. We have the knowledge, depth and breadth of experience to take on the largest of projects. We minimise downtime through well-planned facilities maintenance combined with unbeatable upgrading expertise. This significantly reduces risk for operational interruptions. The overall market for our services grew significantly in 2007 thanks to rising energy prices. This was reflected in the postponement of decommissioning projects, offset by increases in the development of marginal fields; an increasing focus on field life extension projects; and further modifications to aging infrastructure. At the same time, the rising average age of installations in the North Sea has led to greater demand for maintenance services. Our goals for 2008 are to maintain our market share in the traditional MMO market in Norway, and to maintain and improve our UK market share. We will focus on growing in high margin and specialist technology niches. High energy prices and high industry activity levels are expected to continue, leading to further field life extensions and marginal field developments. Tendering levels will remain high for modifications and extension projects. We are ideally positioned for this. Subsea Operating revenues EBITDA Order intake Order backlog Employees Subsea had a high activity level in the fourth quarter with revenue increasing 29 percent compared to the fourth quarter Revenues for 2007 were 42 percent higher compared to Operational and financial performance is developing positively. Service revenue is growing more or less at the same pace as overall revenue. Fourth quarter EBITDA more than doubled compared to the corresponding period in There has been good progress on key projects. Service margins are steadily improving, contributing positively to the EBITDA margin for the quarter of 10.5 percent. The EBITDA margin for the full year was 9.8 percent compared to 6.9 percent in A strong market resulted in the announcement of several contracts: Petrobras Americas Inc. awarded Aker Kvaerner a contract to supply subsea power cables and control umbilicals to its Cascade and Chinook fields in the Gulf of Mexico. The contract, worth approximately USD 65 million, represents a significant breakthrough for Aker Kvaerner's power cable technology. Contracts were signed for delivery of two complete drilling riser systems and associated equipment. The customers are undisclosed, but total contract value is NOK 300 million. Further strides were taken into the Chinese market by signing two contracts with China National Offshore Oil Corporation (CNOOC). One was for the delivery of a complete marine drilling riser system and associated equipment, while the other was for delivery of mooring equipment to a new deepwater semisubmersible drilling unit. Contract values were not disclosed. A frame agreement was signed with Woodside Petroleum Ltd to become the Australian oil and gas giant's preferred supplier of steel tube umbilicals. The contract could be worth between NOK million annually. The frame 2008 Aker Kværner ASA Page 3 of 8 4th Quarter 2007 Report

5 agreement was awarded for a three year period with two optional extensions of one year. A contract was awarded to supply steel tube umbilicals to Woodside Petroleum's Pluto field. The contract is worth approximately NOK 105 million. The contract followed the announcement that Aker Kvaerner had signed a 3 year frame agreement with Woodside, with options for two oneyear extensions, to become the Australian oil and gas giant's preferred supplier of steel tube umbilicals. A letter of intent was signed with Aker Oilfield Services and is set to expand its subsea service offering by providing equipment and personnel to the world's first deepwater Subsea Equipment Support Vessel (SESV). The contract, to commence in 2010 at the latest, is worth approximately USD 60 million over an initial five year period. StatoilHydro, on behalf of the Morvin license group, awarded Aker Kvaerner a contract for the engineering, procurement and construction (EPC) of a complete subsea production system for StatoilHydro s Morvin field in the Norwegian Sea. The contract, worth approximately NOK 1 billion, is a testament to Aker Kvaerner s unique high-pressure/high-temperature (HPHT) subsea technology. The Morvin contract is an addition to the scope identified in the frame agreement signed by Aker Kvaerner and StatoilHydro in September Aker Kvaerner has taken further strides into the booming Asian market by signing two contracts with Daewoo Shipbuilding & Marine Engineering (DSME). Both contracts are for the delivery of a complete deepwater marine drilling riser system with buoyancy package and associated equipment. Combined contract value is approximately USD 75 million. The global subsea market grew significantly in 2007.The key driver behind this growth is the high price of oil, itself driven by dramatic increases in energy consumption, particularly in fast developing countries such as India and China. Market analysts predict this growth will continue over the coming years at an annual rate of approximately 20 percent. Strong growth in new builds of deepwater drilling units has also resulted in a high order intake for drilling risers, a product we began offering with the opening of our new high-tech facility in Malaysia. The global umbilicals market had a solid year. According to Quest Offshore, Aker Kvaerner were the world s leading manufacturer of steel tube umbilicals in 2007, with a volume based market share of 40 percent and a value based market share of 64 percent. One of Subsea s key objectives for 2008 and beyond is to continue the expansion of our strong global position, partly by leveraging the manufacturing centre in Malaysia to become the number one subsea supplier in the Asia Pacific region. We will continue to develop technology in selected areas, particularly within increased oil recovery (IOR), where we already hold a pioneering position. Increasing service revenue is another key goal. This will be met by growth in the installed base and through planned investments into our existing aftermarket facilities. Products & Technologies (P&T) Operating revenues EBITDA Order intake Order backlog Employees Fourth quarter operating revenues in P&T increased by 37 percent compared to the fourth quarter Revenues for the year increased by 63 percent when compared with High activity levels continued in all businesses. EBITDA growth continued in the fourth quarter, ending 76 percent higher than in the corresponding period in EBITDA for the year increased by 81 percent compared to EBITDA margin for the fourth quarter was 7.6 percent and, for the year, 7.8 percent, compared to 5.9 percent and 7.0 percent respectively in 2006 Order intake was high in the fourth quarter. The order backlog at the end of the quarter was at a satisfactorily high level. Two drilling equipment contracts was awarded by Daewoo Shipbuilding & Marine Engineering Co. Ltd (DSME) in Korea; one for a single drill ship, the other for a semisubmersible rig. The total contract value for Aker Kvaerner is approximately USD 213 million. StatoilHydro awarded Aker Kvaerner a contract for the tow and installation of the Gjøa semisubmersible in the North Sea. Total contract value is approximately NOK 180 million. BP Norway awarded Aker Kvaerner a contract for the tow and installation of a floating production, storage and offloading unit (FPSO). The FPSO will be installed at the Skarv field in the North Sea. Total contract value is approximately NOK 300 million. From a market perspective, 2007 was another positive year. All the P&T businesses developed favourably. The market for drilling systems, mooring equipment, processing systems and offloading units enjoyed high activity. With an increasing number of drilling rigs and floating production units entering the market, contracting in marine operations and subsea installation services has also developed strongly. With increasing oil prices, the life of several projects in their tail-end production phase has been extended. This has lead to growing interest in our increased oil recovery (IOR) solutions, which include well intervention and well stream processing. Marine operations have secured full market and operational control of two highly specialised construction vessels. With their high-tech specifications and impressive safety margins, these vessels are ideally suited for operations in harsh marine environments. Aftermarket and service volumes are steadily increasing as the installed base grows. All our market segments are expected to remain strong. The process of integrating the newly-acquired company Wirth GmbH in Germany is progressing as planned and the business contributed positively to the profit growth in the fourth quarter. In February 2008 Aker Kvaerner acquired a majority shareholding in the Norwegian company First Interactive AS. The agreement includes an option to buy the remaining 2008 Aker Kværner ASA Page 4 of 8 4th Quarter 2007 Report

6 shares. First Interactive is a software company specialising in 3D visualisation and simulation for the oil and gas sector. Process & Construction (P&C) Operating revenues EBITDA Order intake Order backlog Employees Revenues in P&C have been somewhat lower in 2007 compared to 2006 as a result of focusing the business. P&C achieved an EBITDA in the fourth quarter which was 37 percent higher than in the fourth quarter EBITDA for the year was 41 percent higher than for EBITDA margin for the fourth quarter was 7.3 percent and for the year 7.2 percent, compared with 4.4 percent for the fourth quarter and the full year Order intake for the three month period was low compared to earlier quarters; however the order intake for the year was 22 percent higher than for 2006.This resulted in an order backlog of NOK 10.9 billion at year end, an increase of 37 percent compared to Magnox Electric Limited awarded a GBP 16 million contract to design, build and install a plant for the retrieval and encapsulation of wet intermediate level wastes (ILW) at Hunterston, a site in West Kilbride, Scotland. The 38 month project is part of the site's nuclear decommissioning programme. Plant start-up is expected in July Antofagasta Minerals S.A. (AMSA) awarded Aker Kvaerner Metals in Chile an engineering, procurement, and construction management contract to develop the Esperanza copper-gold project located in northern Chile. The project's estimated capital investment is valued at USD 1.5 billion. Aker Kvaerner's contract value is approximately USD 35 million for phase I. JBEK, an Aker Kvaerner and BE&K joint venture, was awarded a five-year alliance contract from DuPont Engineering to be the provider of engineering, procurement, and construction management services for U.S. plant-based projects up to USD 10 million. P&C delivered robust profit growth in We have a solid order backlog and a sustainable platform for growing both revenues and margins going forward. Our achievements also indicate that refocusing the business, bringing together Aker Kvaerner s energy, process and related construction activities to achieve greater synergies and better resource utilisation, is paying off. At the same time, this has enabled us to capitalise on a favourable investment environment in the metals sector and in the power generation market in North America. India is a key engineering hub for all of Aker Kvaerner. Their operations deliver important input to many projects locally in India, in the Middle East and, increasingly, worldwide. Aker Kvaerner Engineering Services came back onto a profitable track in 2007, with all sectors of its business performing well. The nuclear clean-up sector has not been very active over the last few years. However, we have had some good and long-term contract successes in the UK in 2007, which position the business for further growth going forward. We will enjoy further success in purified terephthalic acid (PTA), polyethylene (PE), and polypropylene (PP), with a continued focus on China and the Middle East. China is expected to continue as the main driver for petrochemical process investment over the next several years, driven by its growing economy. Aker Kvaerner has established a sourcing hub in China and plans to substantially grow its local operations over the next years. Our emphasis in metals and mining will remain on Australia and South America. This part of our business has a strong market position: in terms of volume we are currently number two overall, and number one in South America. Our objective is to achieve the same status in Australia, with Africa seen as the next key market to target. The metals market is booming, thanks in large part to China s high demand for commodity resources. Our major construction operations in North America, focused on LNG and coal projects, ensure we are well positioned to build on our success in this important market. Other Simen Lieungh (47), a former Aker Kvaerner executive vice president and 20-year company veteran, has been appointed President & CEO of Aker Kværner ASA. Martinus Brandal will be nominated as new Chairman of the Board of the company. The official opening ceremony of Aker Kvaerner s new headquarters was held on Wednesday 23 January. The speakers included President & CEO Martinus Brandal; headquarters architect Niels Torp; Mayor of Bærum, Odd Reinsfelt; and President & CEO of Aker and chairman of the Aker Kvaerner Board, Leif-Arne Langøy. This distinguished group shared their thoughts about the new building and about the opportunities ahead for Aker Kvaerner. Outlook Energy prices and market activity levels are expected to remain strong. The high levels of investment in the oil and gas industry are expected to continue for the next years due to factors such as the gap between supply and demand, high oil prices, and exploration moving to deeper and harsher waters. Aker Kvaerner is enjoying high tendering activity at the start of The order backlog, close to NOK 60 billion, consists of a number of high quality contracts with deliveries from 2008 to It forms a solid foundation for the future. Aker Kvaerner will have a strong focus on the safe and timely delivery of the backlog. In general there are still constraints on resources and the capacity of suppliers and contractors globally. Together with execution of the existing order backlog, Aker Kvaerner continues its strategy to focus on selecting and winning profitable projects with the right risk profile. Aker Kvaerner expects revenues in 2008 of NOK billion and thereafter 8-10 percent annual growth in 2009 and Aker Kvaerner targets to deliver an EBITDA margin of approximately 8 percent for the year 2008, steadily growing to 9-11 percent in Earnings per share is expected to grow percent annually in 2008, 2009 and Fornebu, 13 February 2008 The Board of Directors 2008 Aker Kværner ASA Page 5 of 8 4th Quarter 2007 Report

7 AKER KVAERNER GROUP IN FIGURES 1) PROFIT AND LOSS ACCOUNT Group summary: Amounts in NOK million Note Operating revenues Operating expenses EBITDA Depreciation Operating profit Financial income Financial expenses Share of profit (+) / loss (-) of associates Profit (+) / loss (-) on foreign currency forward contracts Profit/loss before tax Taxation Net profit/loss from continuing operations Discontinued operations Profit for the period from discontinued operations and gain on disposal Profit for the period Attributable to: Minority interests Equity holders of the parent company Basic and diluted earnings per share continuing operations (NOK) 2 2,01 2,30 2,29 2,24 0,05 8,84 4,53 Basic and diluted earnings per share (NOK) 2 2,01 2,30 2,29 2,24 8,71 8,84 13, Amounts in NOK million Note Deferred tax asset Goodwill, patents etc Property, plant and equipment Other operating assets Investments Interest-bearing non-current receivables Income tax receivables Current operating assets Interest-bearing current receivables Deposit to repay second priority lien notes Cash and bank deposits Operating assets classified as held for sale Total assets Equity Minority interests Deferred tax Other non-current liabilities Interest-bearing non-current debt Second priority lien notes Taxes payable Dividend payable Other current operating liabilities Interest-bearing current liabilities Liabilities directly associated with operating assets classifided as held for sale Total liabilities and equity ) In the 2006 accounts the Pulping & Power businesses are presented as discontinuing operations. BALANCE SHEET STATEMENT OF CASH FLOW Net cashflow from operating activities Net cashflow from investing activities Net cashflow from financing activities Translation adjustments Net decrease (-) / increase (+) in cash and bank deposits Cash and bank deposits as at the beginning of the period Cash and bank deposits as at the end of the period CHANGE IN EQUITY Equity as at the beginning of the period Net profit /loss Dividends Treasury shares Foreign currency hedging Translation differences Equity as at the end of the period Aker Kværner ASA Page 6 of 8 4th Quarter 2007 Report

8 Segments: REVENUE BY SEGMENT Field Development Maintenance, Modification and Operations Subsea Products & Technologies Process & Construction Other Total Group EBITDA BY SEGMENT Field Development Maintenance, Modification and Operations Subsea Products & Technologies Process & Construction Other Total Group EBIT BY SEGMENT Field Development Maintenance, Modification and Operations Subsea Products & Technologies Process & Construction Other Total Group NET CURRENT OPERATING ASSETS BY SEGMENT Amounts in NOK million Field Development Maintenance, Modification and Operations Subsea Products & Technologies Process & Construction Other Total Group NET OPERATING ASSETS BY SEGMENT Amounts in NOK million Field Development Maintenance, Modification and Operations Subsea Products & Technologies Process & Construction Other Total Group At the end of first quarter 2007 Aker Kvaerner reorganised its segments. Prior year figures are restated Aker Kværner ASA Page 7 of 8 4th Quarter 2007 Report

9 Notes Aker Kværner ASA (the company) is a company domiciled in Norway. The consolidated financial statements of Aker Kværner ASA comprise the company and its subsidiaries (together referred to as the group) and the group's interests in associates and jointly controlled entities and assets. Statement of compliance Aker Kvaerner's financial reporting is carried out in accordance with International Financial Reporting Standards (IFRS). The condenced consolidated interim financial statments are prepared in accordance with IAS 34 Interim Financial Reporting. It does not include all of the information required for full annual consolidated financial statements, and should be read in conjunction with the consolidated financial statements of the group for The annual report for 2006 is available on Accounting policies The accounting policies applied in the interim financial statements are the same as those described in the annual report 2006 for Aker Kvaerner. Employee benefits Defined benefit plans Calculation of pension cost and liability is done annually by actuaries. In the interim financial reporting, pension costs and liability are based on the actuarial forecasts. Tax Income tax expense is recognised in each interim period based on the best estimate of the expected annual income tax rates. Note 1 Judgements, estimates and assumptions In applying the accounting policies, management makes judgements, estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses. The estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revision to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. In preparing these interim finanical statement, the significant judgements made by management in applying the group's accounting policies and the key sources of uncertainty in the estimates were the same as those applied to the consolidated financial statements as at and for the period ended 31 December Note 2 Share capital and equity At the end of 2006 Aker Kværner ASA had ordinary shares at a par value of NOK 10 per share. On the General Assembly in March the share holders agreed to split one share at par value NOK 10 into five shares at par value NOK 2. The new number of shares, , is used in the calculation of earnings per share in all periods in 2006 to get comparable figures. At year end 2006, the board of directors suggested a dividend of NOK 40 per share for 2006, a total of NOK million. The share holders agreed at the General Assembly. In the first quarter of 2007 Aker Kværner ASA bought a total of own shares for a total consideration of NOK 325 million. In the second quarter a total of shares were bought back for a total consideration of NOK million, in the third quarter a total of shares were bought for a consideration of NOK million and in the last quarter this year shares were bought for NOK 150 million. The average number of shares year to date of is used for calculation of the accumulated earings per share. At the General Assembly the share holders also agreed to reduce the share capital in Aker Kværner ASA by NOK to NOK through cancellation of treasury shares. Total outstanding shares are then Aker Kværner owned own shares at the end of 2007 (1,6 percent of total outstanding shares). After acquisition of own shares in January 2008, Aker Kvaerner holds of the company's outstanding shares which is 1,81 percent. Note 3 Acquisitions At the end of the quarter, Aker Kvaerner acquired 50 percent of Wirth GmbH. There are call- and put-options exercisable in 2-4 years for the acquisition of the remaining 50 percent. During the intermediate period the interest in Wirth will be accounted for as a 50 percent interest in a joint venture, by use of proportionate consolidation. The IFRS- balance sheet of Wirth, as well as the allocations of fair values as at the acquisition date has been included in Aker Kvaerner s balance sheet based on preliminary numbers. The main items represent net current operating items of NOK 159 million. Note 4 Discontinued operations - Pulping & Power Aker Kvaerner's Pulping & Power businesses were sold in the fourth quarter of ENDS For further information, please contact: Media: Jannik Lindbæk, SVP Corporate Communications, Aker Kvaerner. Tel: , Mob: Investor relations: Lasse Torkildsen, SVP Investor Relations, Aker Kvaerner. Tel: , Mob: Career opportunities: visit AKER KVÆRNER ASA, through its subsidiaries and affiliates ("Aker Kvaerner"), is a leading global provider of engineering and construction services, technology products and integrated solutions. The business within Aker Kvaerner comprises several industries, including Oil & Gas, Refining & Chemicals, Mining & Metals and Power Generation. The Aker Kvaerner group is organised in a number of separate legal entities. Aker Kvaerner is used as the common brand/trademark for most of these entities. The parent company in the group is Aker Kværner ASA. Aker Kvaerner has aggregated annual revenues of approximately NOK 58 billion and employs approximately people in about 30 countries. Aker Kvaerner is part of Aker ( a group of premier companies with a focus on energy, maritime and marineresources industries. The Aker companies share a common set of values and long traditions of industrial innovation. As an industrial owner with a percent holding in Aker Kvaerner, Aker ASA takes an active role in the development of its holdings. This press release may include forward-looking information or statements and is subject to our disclaimer, see our web-pages Aker Kværner ASA Page 8 of 8 4th Quarter 2007 Report