OB:KVAER

Stock Analysis Report

Executive Summary

Kværner ASA provides engineering, procurement, and construction (EPC) services for offshore platforms and onshore plants of oil and gas operators in Norway, Europe, Canada, and internationally.

Rewards

Trading at 10.6% below its fair value

Risk Analysis

Earnings are forecast to decline by an average of -20.4% per year for the next 3 years

Dividend of 9.24% is not well covered by earnings or forecast to be in the next 3 years

High level of non-cash earnings



Snowflake Analysis

Flawless balance sheet and fair value.

Share Price & News

How has Kværner's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: KVAER has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.2%

KVAER

-1.4%

NO Energy Services

0.8%

NO Market


1 Year Return

-12.6%

KVAER

-11.9%

NO Energy Services

3.7%

NO Market

Return vs Industry: KVAER matched the Norwegian Energy Services industry which returned -11.8% over the past year.

Return vs Market: KVAER underperformed the Norwegian Market which returned 4.5% over the past year.


Shareholder returns

KVAERIndustryMarket
7 Day-1.2%-1.4%0.8%
30 Day0.5%0.2%2.7%
90 Day-2.7%3.9%6.0%
1 Year-5.5%-12.6%-10.0%-11.9%9.3%3.7%
3 Year0.4%-7.1%-10.5%-16.2%33.6%17.0%
5 Year45.9%16.5%-0.7%-37.5%66.0%27.8%

Price Volatility Vs. Market

How volatile is Kværner's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Kværner undervalued compared to its fair value and its price relative to the market?

10.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: KVAER (NOK10.82) is trading below our estimate of fair value (NOK12.11)

Significantly Below Fair Value: KVAER is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: KVAER is good value based on its PE Ratio (10x) compared to the Energy Services industry average (16.4x).

PE vs Market: KVAER is good value based on its PE Ratio (10x) compared to the Norwegian market (14.2x).


Price to Earnings Growth Ratio

PEG Ratio: KVAER's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: KVAER is overvalued based on its PB Ratio (0.9x) compared to the NO Energy Services industry average (0.7x).


Next Steps

Future Growth

How is Kværner forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

-20.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: KVAER's earnings are forecast to decline over the next 3 years (-20.4% per year).

Earnings vs Market: KVAER's earnings are forecast to decline over the next 3 years (-20.4% per year).

High Growth Earnings: KVAER's earnings are forecast to decline over the next 3 years.

Revenue vs Market: KVAER's revenue is expected to decline over the next 3 years (-4.7% per year).

High Growth Revenue: KVAER's revenue is forecast to decline over the next 3 years (-4.7% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: KVAER's Return on Equity is forecast to be low in 3 years time (5.1%).


Next Steps

Past Performance

How has Kværner performed over the past 5 years?

22.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: KVAER has a high level of non-cash earnings.

Growing Profit Margin: KVAER's current net profit margins (3.5%) are lower than last year (4.7%).


Past Earnings Growth Analysis

Earnings Trend: KVAER's earnings have grown significantly by 22.5% per year over the past 5 years.

Accelerating Growth: KVAER's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: KVAER had negative earnings growth (-15.5%) over the past year, making it difficult to compare to the Energy Services industry average (38.8%).


Return on Equity

High ROE: KVAER's Return on Equity (8.6%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Kværner's financial position?


Financial Position Analysis

Short Term Liabilities: KVAER's short term assets (NOK4.2B) exceed its short term liabilities (NOK2.3B).

Long Term Liabilities: KVAER's short term assets (NOK4.2B) exceed its long term liabilities (NOK631.0M).


Debt to Equity History and Analysis

Debt Level: KVAER is debt free.

Reducing Debt: KVAER has no debt compared to 5 years ago when its debt to equity ratio was 18.2%.

Debt Coverage: KVAER has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: KVAER has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: KVAER has a low level of unsold assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if KVAER's debt is covered by short term assets.


Next Steps

Dividend

What is Kværner's current dividend yield, its reliability and sustainability?

9.24%

Current Dividend Yield


Dividend Yield vs Market

company9.2%marketbottom25%2.3%markettop25%5.7%industryaverage4.2%forecastin3Years9.7%

Current dividend yield vs market & industry

Notable Dividend: KVAER's dividend (9.24%) is higher than the bottom 25% of dividend payers in the Norwegian market (2.4%).

High Dividend: KVAER's dividend (9.24%) is in the top 25% of dividend payers in the Norwegian market (5.71%)


Stability and Growth of Payments

Stable Dividend: KVAER has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: KVAER has only been paying a dividend for 8 years, and since then payments have not increased.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (92.7%), KVAER's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: KVAER's dividends in 3 years are not forecast to be well covered by earnings (186% payout ratio).


Next Steps

Management

What is the CEO of Kværner's salary, the management and board of directors tenure and is there insider trading?

3.8yrs

Average management tenure


CEO

Karl-Petter Loken 0

1.7yrs

Tenure

kr7,006,987

Compensation

Mr. Karl-Petter Loken has been President and Chief Executive Officer of Kværner ASA since May 2018. Mr. Loken served as the Head of Project Development for the oil company Lundin Norway. From 2011 to 2015, ...


CEO Compensation Analysis

Compensation vs Market: Karl-Petter's total compensation ($USD788.35K) is above average for companies of similar size in the Norwegian market ($USD540.73K).

Compensation vs Earnings: Insufficient data to compare Karl-Petter's compensation with company performance.


Management Age and Tenure

3.8yrs

Average Tenure

Experienced Management: KVAER's management team is considered experienced (3.8 years average tenure).


Board Age and Tenure

3.8yrs

Average Tenure

59yo

Average Age

Experienced Board: KVAER's board of directors are considered experienced (3.8 years average tenure).


Insider Trading

Insider Buying: KVAER insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Buykr430,00014 Jan 20
Idar Eikrem
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares40,000
Max Pricekr10.75
Buykr430,00020 Dec 19
Idar Eikrem
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares40,000
Max Pricekr10.75
Buykr432,80015 Aug 19
Karl-Petter Loken
EntityIndividual
Role
Chief Executive Officer
President & CEO
Shares40,000
Max Pricekr10.82
Buykr984,00007 May 19
Idar Eikrem
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares75,000
Max Pricekr13.12
Buykr1,939,03407 May 19
Leif-Arne Langøy
EntityIndividual
Role
Chairman of the Board
Chairman
Shares150,000
Max Pricekr12.93

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Idar Eikrem (56yo)

    Executive VP & CFO

    • Tenure: 3.8yrs
    • Compensation: kr5.33m
  • Ingrid Aarsnes

    Vice President of Investor Relations & Communications

    • Henrik Inadomi

      Senior VP of Corporate Support & General Counsel

      • Tenure: 1.8yrs
      • Compensation: kr3.65m
    • Steinar Røgenes

      Executive Vice President of EPCI

      • Tenure: 4yrs
      • Compensation: kr3.75m
    • Arnt Knudsen

      Senior Vice President of Business Development

      • Tenure: 4yrs
      • Compensation: kr3.85m
    • Elly Bjerknes

      Executive Vice President of Process Solutions

      • Tenure: 4yrs
      • Compensation: kr3.75m
    • Ellen Andersen

      Senior VP & Chief of Staff

      • Tenure: 2.8yrs
      • Compensation: kr3.56m
    • Hans Mølmen

      Executive Vice President of Concrete & New Solutions

      • Tenure: 4yrs
      • Compensation: kr3.56m
    • Sturla Magnus

      Executive Vice President of Structural Solutions

      • Tenure: 3yrs
      • Compensation: kr4.14m
    • Karl-Petter Loken

      President & CEO

      • Tenure: 1.7yrs
      • Compensation: kr7.01m

    Board Members

    • Kjell Røkke (61yo)

      Director

      • Compensation: kr361.00k
    • Leif-Arne Langøy (63yo)

      Chairman

      • Compensation: kr648.00k
    • Lone Schrøder (59yo)

      Independent Director

      • Tenure: 3.8yrs
      • Compensation: kr500.00k
    • Thorhild Widvey (63yo)

      Independent Director

      • Tenure: 3.8yrs
      • Compensation: kr455.50k
    • Jan Haugan (62yo)

      Director

      • Tenure: 1.8yrs
      • Compensation: kr1.53m
    • Rune Rafdal (56yo)

      Employee Elected Director

      • Tenure: 8.6yrs
      • Compensation: kr255.00k
    • Ståle Johansen (51yo)

      Employee Elected Director

      • Tenure: 8.6yrs
      • Compensation: kr167.50k
    • Emil Brustad-Nilsen (38yo)

      Deputy Director

      • Tenure: 3.8yrs
    • Line Breidablikk (34yo)

      Employee Elected Director

      • Tenure: 0.7yrs

    Company Information

    Kværner ASA's company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Kværner ASA
    • Ticker: KVAER
    • Exchange: OB
    • Founded: 2011
    • Industry: Oil and Gas Equipment and Services
    • Sector: Energy
    • Market Cap: kr2.899b
    • Shares outstanding: 267.91m
    • Website: https://www.kvaerner.com

    Number of Employees


    Location

    • Kværner ASA
    • Oksenøyveien 10
    • Lysaker
    • Oslo
    • Oslo
    • 1366
    • Norway

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    KVAEROB (Oslo Bors)YesOrdinary SharesNONOKJul 2011
    KV7DB (Deutsche Boerse AG)YesOrdinary SharesDEEURJul 2011
    0Q2SLSE (London Stock Exchange)YesOrdinary SharesGBNOKJul 2011
    KVAE.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJul 2011
    KVAEROBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBNOKJul 2011

    Biography

    Kværner ASA provides engineering, procurement, and construction (EPC) services for offshore platforms and onshore plants of oil and gas operators in Norway, Europe, Canada, and internationally. The company executes contracts of oil and gas steel jacket substructures and jackets; and EPC delivery of topsides for offshore oil and gas platforms, as well as on floating oil and gas installations. It also provides marine concrete structures for oil and gas field developments; fixed and floating substructures, as well as converter platforms for offshore wind developments; and front-end development services. In addition, the company engages in the project management, design, engineering, procurement, construction, installation, and hook-up of onshore oil and gas projects; marine operations; and decommissioning of offshore oil and gas installations, as well as provision of an unmanned wellhead platform for tieback solutions. Further, it is involved in the cold forming, prefabrication, and welding of pipes comprising risers, riser tools and special riser joints, riser and tools refurbishment, subsea flow loops and flow control modules, modular process/system skids, high pressure manifolds, piping spools production, and minor steel and aluminum structures, as well as modification and maintenance services. Kværner ASA was incorporated in 2011 and is headquartered in Oslo, Norway. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/19 21:24
    End of Day Share Price2020/01/17 00:00
    Earnings2019/09/30
    Annual Earnings2018/12/31


    Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.