2008 in review

Published: 06.04.09

with CEO Petter Aalvik

Omega has now completed the annual accounts for 2008, and I would like to take this opportunity to summarise the important events of the year and the development of the company.

Financial results for 2008 and the road ahead

It is especially encouraging to see that the work that was completed in 2008 has resulted in customer satisfaction, an increase in market share and an increase in people choosing Omega as their employer. As a company that is known for supplying quality personnel and dependable systems, we can meet these tougher times with strength and good spirits. In 2008, our employee base expanded by 128 team members, from 477 to 605 employees (including subsidiaries in Norway and abroad).

Working environment

It is expected that everyone at Omega make health, safety and the environment their first priority when conducting day-to-day business. We all want safe workplaces and a positive working environment. Accidents do not happen, they are caused. In 2008, there were no work accidents at Omega. With 98 per cent turn-out and 2 per cent sick leave, we are definitely a healthy company.

Our welfare programme, Omega Advantage+, has been very popular since its inception, and we chose to expand it in 2008. Some chose to challenge themselves at the Midnight Sun Marathon, others took their partners to Dublin or Kragerø for a social weekend with colleagues. Our properties in Anfi Tauro, Gran Canaria, have proven themselves to be very popular, and more holiday houses were added to the Advantage programme due to great demand. In addition to this, we added a seaside cabin in Bømlo, and more mountain cabins and apartments in an attractive holiday resort in Bulgaria.

Financial results

For the Omega concern, the turnover last year was 662 million NOK, up from 494 million NOK in 2007. Our subsidiaries contributed 49 million NOK in Norway and abroad. Omega AS, its Norwegian subsidiaries (IAT, Kvassen Bygg and Kvassatunet), Singapore and Denmark showed substantial growth; the same growth was not apparent for Canada and The United States due to postponed projects. The financial result after tax for the Omega concern was 19.4 million NOK, down from 21.6 million NOK in 2007. The profit margin after tax was down from 4.3 % in 2007 to 2.9 % in 2008.

In order to analyse the decrease in profit margin, we need to keep in mind Omega’s motto: "Big enough to deliver, small enough to care." In terms of being big enough to deliver, the feedback we receive from our clients is that they want additional services from Omega. We believe that the key to further growth lies in being small enough to care.

The increased size of the company enables Omega to utilise more resources. In 2008, additional capacity was put in place to ensure that Omega can continue to be small enough to care; these measures also cost money, and partly explain the decrease in profit margin. Examples of the aforementioned measures include: additional Advantage accommodation offers; the establishment of new offices in Bergen, Oslo and Stord (IAT); increasing office capacity in Ølen and Stavanger; navbar-brand profiling through logo-emblazoned clothing; substantial upgrades to MarketMaker and the accounting system; the launch of a new Pims technology platform; increased capacity in the Service Centre and administration; and more Department Managers to support our consultants and system engineers. Also worth mentioning is that, in 2008, we altered some accounting principles such that development within technology is now charged as a continuous expense; this will contribute to a more solid balance in the future.

The road ahead

The low profit margin in 2008 reflects an effort to position our company for future growth. We bring to 2009 a high level of service, and an expectation that our capacity will grow and be utilised; this will bring with it higher profit margins. Omega will remain a solid employer and a supplier with sustainable profit margins.

Omega’s strategy is to offer the oil and energy industry our well-established products and services, and to constantly get better at what we do. The key lies in making each other perform better; it is about high service levels, short response times, quality, best practice, precision, follow-up, focus on processes and establishing solid systems that do not overlook any detail. This may not sound like the grandest of schemes, but this is the foundation that will lead to an increase in market share and the establishment of new market positions.

Last week, a Letter of Award was signed with the Shtokman Development Group AG for the delivery of Pims, and we have plenty of large tasks ahead in Project Services, Project Systems and Omega IAT’s construction and engineering business.

Beyond our core business, 2009 will see us continue our community work, focussing primarily on children in need. In 2008 we completed a successful partnership with Save the Children in Russia. In times of economic unrest it is the most vulnerable members of any society who often go without, so this is no time to back down on our commitment to help these groups. We will soon announce our latest partnership, this time working with an organisation close to home, here in Norway.