Aker Solutions ASA Q3 Earnings Call Summary

In the latest earnings call, Aker Solutions ASA (ticker: AKSO), a global engineering company, announced a significant revenue increase of 35% in the third quarter, reaching NOK 13.2 billion.

This performance was underpinned by successful project executions and growth in the Renewables and Field Development segment. The company plans to distribute an extraordinary dividend of NOK 21 per share, reflecting its solid financial standing and commitment to shareholder returns.

Key Takeaways

• Aker Solutions' Q3 revenue rose to NOK 13.2 billion, a 35% increase from the same period last year.
• The company's EBITDA reached NOK 1.2 billion, with a margin of 9.2%.
• An extraordinary dividend of NOK 21 per share has been proposed, with a total payout of about NOK 10 billion.
• The Renewables and Field Development segment saw a 65% revenue increase year-on-year.
• A strong tender pipeline and a secured backlog exceeding NOK 40 billion suggest robust future activity.

Company Outlook

• Aker Solutions forecasts revenue growth of over 40% in 2024 with an EBITDA margin of around 7.5%.
• The company expects to maintain a strong financial position with a net cash balance of NOK 11.7 billion.
• Capital expenditures for the fiscal year 2024 are projected at NOK 1.5 billion.

Bearish Highlights

• A negative cash outflow of NOK 1.2 billion was reported in Q3, though stability is expected in Q4.
• Working capital is anticipated to normalize to negative NOK 4 billion to NOK 6 billion over time.

Bullish Highlights

• The Renewables and Field Development segment's revenue increased to NOK 9.2 billion, up 65% from the previous year.
• Aker Solutions reported a net profit from equity accounted investees, mainly from a 20% stake in OneSubsea, at NOK 245 million.
• The company confirmed a strong project backlog for 2025, anticipating sustained high activity levels.

Misses

• There were no specific misses reported, indicating the company met or exceeded its targets for the quarter.

Q&A Highlights

• CEO Kjetel Digre emphasized the importance of securing viable business cases and local licenses for renewable projects.
• The HVDC topsides at Stord yard are expected to be completed and installed by 2025.
• CFO Idar Eikrem discussed the company's financial health post-dividend payout, noting a net cash positive position and available credit facilities of NOK 3 billion.

Aker Solutions' robust third-quarter performance and strategic focus on renewables and field development position the company for continued growth. With a strong backlog and a solid financial foundation, Aker Solutions is poised to capitalize on the increasing demand across the energy sector while delivering predictable project executions and attractive returns for its shareholders.

Full transcript

Preben Ørbeck: Good morning, and welcome to Aker Solutions Presentation of our Third Quarter Results. My name is Preben Ørbeck, and I am the Head of Investor Relations…

Idar Eikrem: …Thank you. I will now take you through the key financial highlights of the quarter, our segment performance and run through our financial guidance…

A – Preben Ørbeck: Welcome, everyone, to the Q&A session of today's presentation…

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