Market: The Norwegian company, Omega, sold project systems and consultant man hours to the oil and gas industry for NOK 1.6 billion last year. Now, the company is looking to expand into other areas by starting two new subsidiary companies.
Published in the Norwegian Financial Review, 14 April 2014
Text: Erlend Wessel Carlsen
The brothers, Sigmund Lunde and Tor Erling Lunde, started out with a modest IT shop in the small town of Ølensvåg, in the late 80s. Today, the “shop” can be referred to as one of Norway’s leading IT companies, with a strong presence all over the world, and a turnover of approximately NOK 1.6 billion last year.
This makes them one of Norway’s top 25 IT companies. Along with CEO Petter Aalvik, the brothers own more than half of the company.
“We`ve experienced solid growth in Houston, Singapore, and many parts of Asia. It is also interesting that we have experienced new actors starting building projects in the North Sea. Our software program PIMS has been well received, as well as our consultant services for the completion of projects,” summarizes Aalvik to Finansavisen.
A stifled market
Omega
| Mill. kr | 2013 | 2012 | |
|---|---|---|---|
| Turnover | 1.558,2 | 1.287,9 | |
| Operational Results | 87,6 | 59,4 | |
| Results before taxes | 86,6 | 57,6 | |
| Results after taxes | 59,9 | 41,1 |
- Originated in 1991 as a continuation of Futura Datasenter. ?
- Provides project control systems (Pims) and consultant services tailored made for the oil and gas industry.
- The slogan, «big enough to deliver, small enough to care», was discovered by Sigmund Lunde on a trip to Kenya, he subsequently “borrowed” it for his own Omega.
- Their main office is in Ølensvåg. Other offices are located in five Norwegian cities, Denmark, Australia, USA, Singapore, Canada, Britain, and Lithuania. The company currently has 1.095 employees.
- Major stakeholders in the company are founder Sigmund Lunde (23,2 percent), his brother, Tor Erling Lunde (17,8 percent), and CEO Petter Aalvik (10,7 percent).
The growth in turnover from 2012, to this past year, has increased by 21 percent, despite the general stagnation of the oil and gas market in this period.
“Our clients are working towards a decrease in capital expenditure and an increase in return on every investment. This has resulted in slight decrease in consultant requests in the market over the past few months,” says Aalvik.
“How are you able to keep up the growth and development in stagnate times?”
“The software program, Pims, and the competence of the consultants in Omega generate an attractive position in the Norwegian market. We estimate that suppliers who aim to assist their customers in reaching their goals will have their hands full in the time to come.”
Aalvik explains that the company expects a lower growth rate for this year, but there will be “interesting opportunities” as long as the level of investment in the North Sea remains high.
Starting new companies
However, Omega has taken steps to keep up the growth; two new Omega companies have recently been created. While the goal of Omega AS has been to focus on their IT systems and consultant services in the oil and gas industry, the two new companies will seek out other areas. They will strive to gain knowledge and competence to enter into other segments of the market.
Omega IT Consultants will offer consultant services within the entire IT sector, whereas Omega IT-ledelse (Management) will focus on strategic IT consulting in Southwest region of the country.
“The technology and IT segments create the foundation of our business in Omega, and our software program created for project management (PIMS) has become a trademark within the industry. Within Omega, competency, capacity and experience within recruitment can be found. We can therefore wish to develop our IT services beyond PIMS, in order to reach the whole IT spectrum and work with other technology platforms,” says Aalvik, mentioning that the banking, finance, trade, industry, and public sectors are all potential markets they aim to enter.
“Why are you doing this at this point in time?”
“This is something that we have thought about doing for some time now. But with all of the growth in the oil and gas sector, we had to focus all of our capacity on that. However, with the prospect of stagnating growth in 2014 we have decided to make our plans for expansion a reality. Also, we have now found well-qualified personnel to start up the new companies. “
Remaining in control
The managers of the new companies are recent additions to Omega, but the consultant base will be sourced from the mother company. With over 1000 employees and with salary and employee costs reaching NOK 1.3 billion kroner last year, the company will have enough to go on, should the oil and gas business take up less time.
This past Autumn, Sigmund Lunde told Finansavisen that they have received various acquisition offers, but that they are more comfortable with having control of the company in their own hands, so that decisions can be made quickly. Last year, the owners took out dividends for the first time since 2006; this sum amounted to 15 million kroner. Download PDF (Norwegian only)