Struggling engineering group in the red

The Norwegian ship-building group made a £36m loss in the second quarter of its financial year, because of delays in the construction of ships and cost overruns.

The company, however, predicted an upturn in the second half of the year, saying its operations in Finland were strong due to new oil and gas contracts in the pipeline.

Last year, Kvaerner was forced to write off 230m Norwegian Kroner (£18m) after it discovered an error in its accounts between 1998 and 2000. The mistake, a failure to account for some costs, had been missed by both KPMG and Andersen.

The company also fell into financial dire straits two years ago but was rescued from insolvency at the last minute by its largest shareholder.