UK based engineering and construction player Subsea 7 saw profits go up in the third quarter of 2014 on operating income jump, lower costs and lower currency losses.
The company scored $206 million in net income, compared with $160 million in the third quarter (Q3) last year. As for the first nine months of 2014, Subsea 7 reported profit of $607 million, versus $278 million year-over-year. This also resulted in diluted earnings per share of $0.57 compared to $0.42 in the third quarter 2013.
Subsea 7 reported that the revenue for the quarter increased $338 million, compared with Q3 2013 to $1.9 billion, on higher activity in APME and NSC. Nine months revenue was $ 5.5 billion, versus 4.7 billion in 2013.
The company’s adjusted EBITDA for Q4 was $426 million, an increase of $67 million compared to the third quarter 2013. Adjusted EBITDA margin was 22.4%, compared with 23.0% in Q3 2013.
In addition, net operating income was $324 million, compared with $269 million in Q3 2013, due to high utilisation of the PLSV fleet in Brazil in addition to approximately $40 million reduction in the full-life project loss on the Guará-Lula NE project being recognised in the third quarter 2014.
However, Subsea 7 reported a drop in its Q3 order backlog and warned that the slip of oil prices could delay future offshore projects.
Despite the current insecurity in the market, the company kept its guidance for the full year 2014, expecting a moderate increase in revenue and Adjusted EBITDA.
“I am pleased to report that we continued to deliver strong operational performance in the third quarter of 2014, which supported the solid financial results. Global vessel utilisation was strong at 91 % and was five percentage points higher than in the third quarter of 2013, matching the high level achieved in the second quarter of this year. Significant net cash was generated from operating activities in the third quarter. This supported continuing payments under our new vessel construction programme, returns to investors in the form of a dividend and the repurchase of shares and convertible bonds. Order backlog declined in the third quarter, owing to a low level of order intake caused by the postponement of a number of potential market awards, a low level of escalations on existing contracts and a negative foreign exchange impact of approximately $300 million,” said Jean Cahuzac , Chief Executive Officer.
Subsea World News Staff