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Aker Kvaerner 3rd quarter results 2006 - Strong performance


The third quarter marks another period with improved results for Aker Kvaerner. The NOK 822 million EBITDA for the third quarter is an increase of 53 percent compared to the third quarter of 2005. The award of major new contracts and growth in existing contracts, resulted in a NOK 24.6 billion order intake and order backlog of NOK 68.3 billion. Refinancing of the Group is initiated to reduce interest costs and obtain dividend flexibility.

Consolidated operating revenues in the third quarter totalled NOK 13 400 million, an increase of 33 percent compared with the same quarter last year. This reflects strong markets and high activity in all reporting segments.

EBITDA for the third quarter was NOK 822 million, an increase of 53 percent from NOK 539 million in the third quarter 2005. The quarterly EBITDA margin was 6.1 percent compared to 5.4 percent in the third quarter last year. Year to date EBITDA of NOK 2 265 million increased by 67 percent from NOK 1 356 million in the corresponding period last year. Year to date EBITDA margin is 5.8 percent.

The all-time high third quarter order intake was NOK 24.6 billion, which brings the order backlog to a solid NOK 68.3 billion.

Cashflow from operating activities was NOK 587 million in the third quarter, reflecting a NOK 196 million decrease in net current operating assets. Cash and bank deposits at the end of September amounted to NOK 6.8 billion. The liquidity buffer, including undrawn credit facilities of NOK 2.2 billion, was a comfortable NOK 9 billion.

Today Aker Kværner is announcing an overall refinancing plan. A group of Nordic and international banks have underwritten the total financing requirement of EUR 850 million. The new financing is expected to be in place as of 1 December 2006. Through this refinancing, the gross debt will be reduced by approximately NOK 1 billion. The refinancing will increase the financial flexibility of the company substantially. Going forward, interest costs will be reduced by approximately NOK 180 million per year, and there will be no dividend restrictions.

With the high capacity utilisation in the industry, the focus for Aker Kvaerner will continue to be selecting and executing the right projects successfully. The market is still expected to be strong with attractive opportunities.

Metso’s application for the clearance of its acquisition of Aker Kvaerner’s Pulping and Power businesses is currently subject to phase II review under the EU merger regulation. Aker Kvaerner expects closing to take place in the fourth quarter.

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, Power Generation and Pulp & Paper. The Aker Kvaerner group is organised into two principal business streams, namely Oil & Gas and E&C, each consisting of 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 41.4 billion and employs approximately 24 000 people in more than 30 countries.

Aker Kvaerner is part of the Aker Group (, a leading multi-industry powerhouse with more than 50 000 employees and NOK 80 billion revenues. Aker owns 50.01 per cent of Aker Kvaerner, and the group is also a major European shipbuilder and a significant participant in the fisheries industry.

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