Saipem 1Q revenue, profit down

Italian oilfield services contractor Saipem recorded a drop in revenue and profit in the first quarter of 2017, however it said the drop was in line with expectations.

Revenue fell to 2.26 million euros, from 2.84 million a year ago. Net profit was 47 million euros, a decrease from 61 million in the first quarter of 2016.

In a conference call on Friday, Giulio Bozzini, Saipem, Chief Financial and Strategy Officer said the 1Q 2017 decrease was across all the business segment due to lower activity levels across the board.

The company said revenue fell 20 percent mainly due to a contraction in Offshore E&C and Drilling sectors.

Stefano Cao, Saipem CEO, said the relative stability of oil prices of around 50 a barrel, has not translated yet into a change in investment approach by the upstream oil and gas player, and the oilfield services market is expected to remain depressed in 2017, especially in offshore EP.

In the offshore engineering and construction business segment revenues for the first quarter 2017 amounted to €1,205 million, down by 25.1% compared to the first quarter of 2016. This was mainly attributable to lower volumes recorded in Kazakhstan, Central South America and West Africa, which was partly offset by higher volumes registered in North Africa.

Revenues for the first quarter of in the offshore drilling segment amounted to €162 million, representing a 33.3% decrease compared to the first quarter of 2016, mainly attributable to reduced revenues from the semi-submersible rig Scarabeo 9, which underwent class reinstatement works in the quarter, and from the semi-submersible Scarabeo 7, which was temporarily contracted out at stand-by rate.

The decrease in revenues was slightly offset by increased revenues from the full-scale operations of the jack-up Perro Negro 5, which had undergone upgrading works in the first quarter of 2016.

The CEO said negotiations were underway to extend Scarabeo 8 rig contract until the end of the year.

While negotiating contract extensions for some of its rigs, CEO said there might be no opportunities for its rigs currently stacked. On that note, Cao said Saipem would shortly make a decision on whether to scrap Scarabeo 6 semi-submersible rig.

Saipem has affirmed its full year guidance expecting revenue of around €10 billion, net profit of more than €200 million and capex of around €0.4 billion.

Offshore Energy Today Staff