THE Teesside arm of global engineering firm Aker Kvaerner has announced a return to profit following a management reshuffle.

Aker Kvaerner's Engineering Services has undergone major staff restructuring and brought in a new leadership team.

Director Martin Moon said the result has seen the business, which employs 1,200 staff across the Tees Valley, become profitable again.

"AK Engineering Services was a weak link in the Aker Kvaerner chain last year," he said.

"However, as a business it is now moving from being a drain on Aker Kvaerner to being profitable."

He said that, since three businesses within the Aker Kvaerner group amalgamated under the single banner AK Engineering Services in 2003, the company had been making a loss.

A number of employee contracts were not renewed and a new management team, including a new president and director, was taken on last year. He said the company was making losses last year and for the first five months of 2005, but was breaking even in June and in profit during July.

President Mark Leggett said: "We have had some challenging times recently in the Engineering Services business here on Teesside. We now have a strengthening business, we are committed to the region and we will focus all our efforts on adding value to our customers' business needs."

This year's successes for AK Engineering Services include winning a £30m contract to carry out modifications to BP's Central Area Transmission System (Cats) terminal at nearby Seal Sands and clinching a £3.5m contract to upgrade a nuclear power station in Kent.

The firm's return to profit comes as the Norwegian Aker Kvaerner group announced a 36 per cent increase in profits to 440 million Norwegian kroner (£38.8m) in the second quarter compared to last year.

The figures represent the full recovery of the group, which narrowly avoided bankruptcy in 2001 through a merger with Norwegian rival Aker Maritime.

The merger was a lifeline for the struggling business, which was within days of collapse when it ran out of cash in November 2000.

Earlier that year, it had sold off Cleveland Bridge as part of a cost-cutting measure.

Aker Kvaerner is now a leading provider of engineering and construction services, technology products and integrated solutions.

The business spans a number of industries, including oil and gas, pharmaceuticals, metals, power, chemical, pulping, environmental technologies and shipbuilding.