Due to positive development in both order intake and productivity for Aker Yards, the operating results for 2004 are expected to be somewhat better than what has been guided previously. Total revenues, which have been guided to be NOK 11-12 billion for 2004, will end in the top end of the range. The EBITA margin, previously guided to be above 3 %, will end up above 4 %, before non-recurring items.
As announced on 8 September, Aker Yards will combine its entities in Finland into one organization. Today the Finnish yards announced that in order to cover the costs of this restructuring, a non-recurring provision in the level EUR 18-20 million, will be booked against the fourth quarter results. Future synergy effect from the combination is expected to be in the range of EUR 20 million annually. This will mainly be a result of reducing overlapping activities, and concentrate on core competences.
Today, invitation to enter into formal negotiations with the employee representatives, to reduce the workforce at the three yards in Finland has been sent out. Negotiations are expected to start in mid November, and are anticipated to be finalized before mid January 2005. The company last year concluded a corresponding, successful restructuring in Germany, and a similar process is recently implemented for the yards at the Northwest coast of Norway.
Integration project teams have been working to facilitate the merger. Based on these findings, the process is moving into a new phase. To be able to take out synergies from the combination in Finland, to make the cost-base more flexible, and to improve the productivity, further restructuring measures will be initiated shortly. Among others this will make it necessary to reduce the workforce at the three yards, the preliminary estimation being approximately 700 people in all.