As a result of challenges in the three Finnish yards, mainly related to the ferry projects, Aker Yards is revising its earnings forecasts. Project estimates have been revised, and the operating results for the second quarter and for 2007 will be lower. At the same time, Aker Yards is announcing divestments that allow for a sustainable payment of dividend to shareholders for 2007.
The EBITDA figure for Aker Yards for 2007 is estimated to be about NOK 1000-1100 million, and the net profit estimated about NOK 800-900 million. As a result of the revised cost estimates, the EBITDA margin is estimated to be in the range of 5-6 percent in 2008. The long term target of 7 percent is maintained. For the Business area Cruise & Ferries in 2007, the EBITDA margin is expected to be approximately 2.5 - 3 percent. Operating revenues in 2007 is expected to be at approximately NOK 35 billion.
The main reason for the revised estimates lies in the heavy load in the Finnish operations, and is mainly related to the building of ferries. The very high level of growth in activity level at the same time as the market is booming has lead to a lack of resources giving a knock-on effect on the total backlog of ferries. The number of ferries in the backlog in Finland is seven, of which five will be delivered in the next 12 months. In addition, the suppliers of the shipyards are also experiencing a booming market, leading to higher prices than anticipated. This is giving a negative effect on most of the backlog in the business area Cruise & Ferries.
Yrjö Julin, who was appointed President and CEO on 11 June 2007 states in a comment: "We have decided it is correct to revise project estimates, primarily related to ferries based on the cost increases we see in the suppliers market, our tight delivery schedule, as well as the general high activity level in all areas of the value chain. "
Julin continues "I am not pleased by having to bring this news to the market. We take this matter very seriously, and will dedicate ourselves fully to improve the situation. However, I am convinced we have a good foundation for improvements, and that the entire organization will pull together to make this work. We have identified a set of immediate actions in order to rectify the situation, and the operating model in Finland will be re-evaluated, and a new structure will be in place soon."
As a result of the ongoing process in Finland, the second quarter results release for 2007 has been postponed to 24 August 2007 at 0830.
Management will be available for inquiries from the press and investors on Friday 6 July.
A conference call for investors is scheduled at 1600 CET. Please call +47-80080119 if you are calling from Norway or +47-23000400 if you are calling from outside Norway
Yrjö Julin, President & CEO, phone: +47 908 609 85
Leif Borge, CFO, phone +47 917 86 291
Tore Langballe, SVP, Communications & IR, phone +47 90 77 78 41
Elise Heidenreich, Investor Relations Manager & Analyst, phone +47 95 14 11 47
Aker Yards ASA is an international shipbuilding group focusing on sophisticated vessels. The group has a strong position both in terms of innovation, product range, technology, experience and capacity. The product range includes cruise vessels & ferries, merchant vessels, offshore & specialized vessels. Aker Yards comprises 18 yards in Brazil, Finland, France, Germany, Norway, Romania, Ukraine and Vietnam. Aker Yards has approximately 20,000 employees.
This press release includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. Such forward-looking information and statements are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for Aker Yards ASA and its subsidiaries and affiliates (the "Aker Yards Group") lines of business. These expectations, estimates, and projections are generally identifiable by statements containing words such as "expects," "believes," "estimates" or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets for the Aker Yards Group's businesses, oil prices, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time. Although Aker Yards ASA believes that its expectations and the information in this Press release were based upon reasonable assumptions at the time when they were made, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in this Press release. Neither Aker Yards ASA nor any other company within the Aker Yards Group is making any representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the information in the Press release, and neither Aker Yards ASA, any other company within the Aker Yards Group nor any of their directors, officers or employees will have any liability to you or any other persons resulting from your use of the information in the Press release.
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