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Kvaerner PLC (BB20)

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Wednesday 21 August, 2002

Kvaerner PLC

Kvaerner Iterims

Kvaerner PLC
21 August 2002

Kvaerner Group interim results: positive trend continues

LONDON, 21 AUGUST 2002: Kvaerner, the international oil services and products,
engineering and construction, pulp and paper, and shipbuilding Group, today
announced its results for the six months ending 30 June, 2002.  The positive
trend in the Kvaerner Group continued in the second quarter. Profit before tax
for the first half of the year was NOK 516 million, compared with NOK 205
million in the same period last year. Several special operating charges, sales
and exchange gains are included in the accounts.

Earnings before interest, tax and amortisation (EBITA) and excluding the
exceptional gains and special operating charges, amounted to NOK 494 million
in the first six months. The combined effect of special items, sales gains and
amortisation amounted to NOK 234 million negative, and EBIT was NOK 260
million in the six-month period.

Kvaerner Shipbuilding improved its EBIT significantly from the first to the
second quarter. For the first six months of the year EBITA for the business
area was NOK 323 million. Aker Kvaerner, the oil and gas business, reported
NOK 259 million in that period, not including a NOK 106 million sales gain
booked as a result of the closing of the sale of the Hydrocarbon business.

In the first six months, the Kvaerner E&C (Engineering & Construction)
business area reported a negative EBITA of NOK 205 million, whilst Kvaerner
Pulp & Paper's EBITA in the six-month period was negative NOK 64 million. The
Kvaerner E&C figures include special operational items that amount to
approximately NOK 200 million, negative.

During the second quarter the Norwegian Kroner strengthened against other
currencies, creating a gain at the end of June of NOK 407 million. Since then,
currency transactions have been concluded that secures most of the unhedged
During August Kvaerner's lenders approved the business plan for the Group, in
accordance with the overall refinancing agreement concluded at the end of last
year. This forms a sound foundation for the Group going forward.

Net interest-bearing liabilities at the end of June were NOK 570 million,
significantly down from NOK 940 million three months earlier, and the figure
of NOK 6.3 billion at the end of last year. The equity ratio was 24.6 per cent
at the end of June, 2002.

The improvement of operations is a key priority throughout the Group. 
Initiatives for increased efficiency and competitiveness were identified in
Aker Kvaerner following the merger, and these are currently being implemented.

The Kvaerner E&C business area was divided into two - the Americas, and
Europe/Asia Pacific regions, and management capacity was added to strengthen
operations. Cost and capacity reduction measures were introduced and
loss-making operations in Canada and Australia are being wound up.

Similarly, Kvaerner Pulp & Paper focused on restructuring and priorities for
its Chemetics business stream. In a separate initiative, potential synergies
between the Fiberline and Power business streams are being identified.

In the second quarter, the Group order intake was NOK 8.8 billion, and the
order reserve at the end of June amounted to NOK 43.3 billion, compared with
NOK 47.5 billion three months earlier.

Aker Kvaerner reported a further strengthening of its order reserve. The other
business areas saw their order reserves decline from the first to the second
quarter this year. They need new orders to maintain activity at present

Aker Kvaerner's performance is expected to remain relatively strong in the
second half of 2002, whilst profits in Kvaerner Shipbuilding will decline
significantly, following the very strong first six months. The slight
improvement seen in Kvaerner Pulp & Paper in the second quarter, is expected
to continue through the rest of the year, and the losses within Kvaerner E&C
are expected to decline, as loss-making projects are being completed and costs

For further information:

Oslo, Norway: Geir Arne Drangeid, Senior Vice President, Group Communications,
Kvaerner ASA: +47 913 10 458 or [email protected] 

London, UK: Paul Emberley, Vice President, Group Communications, Kvaerner ASA:
+44 (0)20 7339 1035 or +44 (0)7768 813090 or [email protected] 

To download the press release, presentation, and quarterly report (including
consolidated key figures for the Group, and key figures for the business
areas) visit 

Notes to editors:
NOK = Norwegian Kroner;  US$/NOK - .7.5;  UKĀ£/NOK - 11.5;  EUR /NOK - 7.4

Later in the day, at 3.00pm (London time), (10am EST), Helge Lund, Kvaerner's
Group President & CEO, and Trond Westlie, CFO, will present the results for
international media and analysts via a conference call from Oslo, Norway, and
will answer questions. If you would like to participate in the telephone
conference you may dial-in, listen and take part by calling +44 (0)20 8240
8243, quoting 'Kvaerner Results' if you are in the UK/Europe.  In North
America, at 10am (EST), participants may call +1 800 530 2462 quoting
'Kvaerner Results'. An instant replay will also be available for a period of
five days after the telephone conference by calling (UK/ Europe) +44(0)20 8288
4459 (access code: 421902) or in the USA, call +1 800 495 0250 (access code:

Kvaerner is a world-class international oil services, engineering and
construction, and shipbuilding Group, with the capability and resources to
undertake the world's most challenging projects.  Today's Kvaerner is an
industrial technology provider.  It meets the needs of its customers by adding
value to their business - through the provision of innovative, cost-effective
solutions - for challenges in the hydrocarbons, process, and maritime
industries.  The Group's activities are organised in four core business areas:
Aker Kvaerner (Oil & Gas), E&C (Engineering & Construction), Pulp & Paper, and
Shipbuilding.   Following the merger between Aker Maritime and Kvaerner's Oil
& Gas business, the Kvaerner Group expects to have revenues in 2002
approaching US$6 billion, with some 42,000 permanent staff located in more
than 30 countries throughout Europe, Africa, Asia and the Americas.

                      This information is provided by RNS
            The company news service from the London Stock Exchange

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