Bergen Group Q2 2011

Bergen Group (OSE: BERGEN) had its highest revenue since 2009, toppling 1 billion NOK and up 30% from Q2 2010, during second quarter of 2011. Net profit was 15 million NOK. Net working capital is now at a high level again as there are four ships coming into the yards in the near future. Equity share has grown to nearly 50%. Debt situation is solid: next and only larger financing need in sight is in July 2013 with the maturation of a 330 million NOK bond loan.

Shipbuilding has had a few slow quarters but has managed to keep costs under control. It is now about to enter a period of high activity and there is also high tender activity in shipbuilding. One vessel was removed from order backlog as financing did not come into place. Financing is also yet to be solved for four BOA Offshore ordered vessels worth 1.9 billion NOK.

Maritime Service division aims to maintain flexibility. The group is going for more synergies and cooperation between divisions and Maritime Service & Shipbuilding and Offshore & Technology segments for example have people shifting between them. Offshore division was the star performer with nearly half a billion in revenue in Q2 and also maintained a solid 11+% margin. Offshore was in the minus for the entire 2010 but has rebounded strongly in 2011.

Bergen Group feels that lack of engineers can be a bottleneck particularly in the whole offshore industry concerning the growth there and has therefore signed an agreement with ITC Infotech India and will be moving people from India to Stavanger. The group has also invested in new office spaces and sees that as an additional aid in recruiting engineers. The outlook is good short and long term and the new discoveries in the North Sea should help further.

New strategy process has been initiated but there is no urgency the new CEO says. A while back a number of key employees resigned and or were pushed out over disputes concerning the strategy going forward; the old leadership wanted a quicker push for growth. The stock was up on the reporting day (last Thursday) but has since returned on a downward trajectory.