Saipem sinks to 1H loss. Cuts full-year revenue guidance

Italian oilfield services giant Saipem posted a net loss of 110 million euros for the first half of 2017, a drop compared to a net profit of 53 million euros in the same period a year ago. Revenues fell to €4,59 billion, down from €5,27 billion a year ago.

According to Saipem, its revenues in the offshore engineering and construction business segment fell to €2,02 billion, down by 20.3% compared to the first half of 2016.

This was mainly attributable to lower volumes recorded in Kazakhstan and Central South America, which were partly offset by higher volumes registered in North Africa.

Offshore drilling revenue amounted to to €323 million, representing a 33.7% decrease compared to the first half of 2016, mainly attributable to reduced revenues from the semi-submersible rig Scarabeo 9, which underwent class reinstatement works in the first quarter, and from the semi-submersible rig Scarabeo 7, which was temporarily contracted out at stand-by rate.

The drop in revenue was also due to the non-contributions during the period from the jack-ups Perro Negro 2 and Perro Negro 3, which are currently not under contract and were fully written-down as of December 31, 2016.

The decrease in revenues was in small part 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, saipem said.

Citing challenging situation in the oil and gas market, especially in the offshore sector, the company has lowered its full year revenue guidance from €10 billion to around €9.5 billion.

Stefano Cao, Saipem CEO, said: “In the first half of 2017, Saipem’s performance was solid from both an operational and management point of view. The rationalization and strengthening of the newly implemented organizational model continued and should lead to greater efficiency and effectiveness, as well as to a further reduction in operational costs. With these actions Saipem will be better positioned to meet the market upturn. Despite the persistence of a difficult market context, the Company has good visibility for significant order acquisitions in the near future.”


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