Saipem returns to profit on the back of strong offshore division

Italian oilfield services contractor Saipem returned to profit in the first quarter of 2019 from a loss in the prior-year period thanks to strong performance in the Offshore Engineering & Construction division. 

Saipem’s Scarabeo 8 drilling rig. Author: SP Mac

According to its financial report for the first quarter of 2019, Saipem’s revenues increased by 12.6% to €2.16 billion ($2.4B) in 1Q 2019 from €1.915 billion ($2.2B) in the first quarter of 2018.

This was due to increases recorded by all divisions, and particularly by the Offshore E&C division.

The company recorded a net profit of €21 million in the first quarter 2019, back from a loss of €2 million in the same period of 2018.

The company’s backlog at the end of the quarter totaled €12.98 billion compared to €12.6 billion at December 31, 2018.

Capital expenditure during the first quarter of 2019 was €74 million, which is an increase compared to expenditures of €32 million in the first quarter of 2018.

Stefano Cao, Saipem CEO, commented: “The results of the first quarter of 2019 confirm the good operational and managerial performance already recorded in 2018, especially thanks to the strong results of the Offshore Engineering & Construction division. We have received significant new orders that improve our visibility for 2019 despite a market context that still shows no evident signs of recovery.”

Looking ahead, Saipem said that high volatility in the price of oil and the ongoing low level of spending by the oil companies will probably continue in 2019. The order backlog at the end of 2018, combined with contract acquisitions in the first quarter and forecasts on current commercial tenders, allow the management to forecast revenues for 2019 of around €9 billion, with an adjusted EBITDA margin in excess of 10%.

Capital expenditure is forecast at around €500 million, while net debt pre-IFRS 16 is expected to be around €1 billion at the end of 2019.

Offshore Energy Today Staff

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