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Kvaerner to Pay First Dividend Since 2015

By  AOG Staff Tuesday, 12 February 2019 04:13
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Oil platform builder Kvaerner on Tuesday unexpectedly proposed its first dividend since 2015 and said it may make another such payment later this year, sending its shares soaring.

(Photo: Sydvest / Kvaerner)
(Photo: Sydvest / Kvaerner)

The company said it expected to compete for contracts worth 30-50 billion Norwegian crowns ($3.5-5.7 billion) over the next five years, with larger deals likely in 2020 and 2021.

Despite lower core earnings in the fourth quarter, the company said its "strong financial position" allowed it to propose a dividend payment of 1 crown per share, meaning it would pay about 268 million crowns in total.

"Our dividend policy remains the same, and that means we will evaluate dividend payments every half year ... we will evaluate dividends after the second quarter," Kvaerner Chief Financial Officer Idar Eikrem told a presentation.

Oslo-listed Kvaerner shares were up 7.8 percent by 0907 GMT, outperforming the European oil and gas index, which rose 0.62 percent.

"The share price rose on the surprise announcement of a dividend, improved outlook and good order intake," analyst Morten Nystroem at Arctic Securities said.

Kvaerner's order backlog at the end of the fourth quarter stood at 10.6 billion crowns, unchanged from the third quarter, after a quarterly order intake of 1.7 billion crowns.

"We see upcoming projects both within our traditional segments for newbuild offshore oil and gas platforms, as well as in growth segments such as upgrading of existing platforms and new offshore wind power projects," Kvaerner's Chief Executive Karl-Petter Loeken said.

The company plans to bid for several international contracts outside its core home market, he added.

Kvaerner's Field Development segment, which includes joint ventures, reported 75 million Norwegian crowns ($8.62 million) in earnings before interest, tax, depreciation and amortization for the fourth quarter, down from 234 million a year earlier.

The company said it expected its full-year gross revenues in 2019 to be above 7 billion crowns, broadly in line with 7.3 billion in 2018, and expected its capital expenditure to be around 300 million crowns this year.


($1 = 8.7055 Norwegian crowns)

(Reporting by Nerijus Adomaitis; Editing by Dale Hudson and Terje Solsvik)

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