Saipem’s 3Q revenue and profit rise

Italian energy services provider Saipem reported a rise in 2019 Q3 revenue and profit. The company’s revenue for the quarter grew to 2,36 billion euros, up from 2,22 billion a year ago. Net profit was 30 million euros, compared to a net loss of 34 million a year ago.

Saipem’s offshore and engineering and construction division reported a slight decline in revenue from EUR 1,06 billion in 3Q last year to EUR 998 million in Q3 2019.

New contracts in the division came in at 661 million euros in the third quarter, down from 1,04 billion in the corresponding quarter of 2018.

Saipem said that most significant awards for offshore E&C in the third quarter of 2019 related to three new contracts for BP, in consortium with Boshelf LLC and STAR GULF FZCO, for the development of the gas and oil field Azeri Chirag-Gunashli (ACG) off the coast of Azerbaijan.

Saudi Aramco offshore fields boost onshore E&C order intake

Worth noting, Saipem’s Onshore Engineering & Construction saw a substantial increase in new contracts for the quarter, boosted by Saudi Aramco’s awards related to Berri and Marjan offshore gas fields.

Namely, Saipem reported 3,57 billion euros in new contracts for the quarter for its Onshore E&C business. This is compared to $1.04 billion in the third quarter of 2018. What is more, new contract intake for the division in this single quarter surpassed the value of new contracts awarded to Saipem’s Onshore E&C division in the first nine months of 2018, during which Saipem had secured 3.3 billion euros in new contracts.

“The most significant awards [to the Onshore E&C division] in the third quarter of 2019 relate to two new contracts for Saudi Arabian Oil Company, encompassing engineering, construction, and installation for the development of onshore facilities of the Berri and Marjan gas fields, both located in the Arabian Gulf,” Saipem said.

The onshore E&C division’s revenue in 3Q 2019 slightly rose to 974 million euros vs last year 3Q’s 958 million euros.

Offshore drilling revenue up

Saipem’s offshore drilling business, operating 4 semi-submersible rigs, 2 drillships, 7 jack-ups and one tender assisted drilling barge, saw its revenue rise to 121 million euros, up from 115 million in q3 last year, with new contracts in the quarter valued at 128 million, up from 29 million secured in q3 2018.

For this division, the most significant awards in the third quarter of 2019 relate to a new four-year contract for ADNOC in the United Arab Emirates, continuing ongoing operations utilizing the jack-up rig Perro Negro 8.

Onshore drilling revenue and contract intake also grew in the quarter. Revenue was 136 million, up from 124 million, and new contracts valued at 42 million euros were secured, an increase versus 18 million euros awarded in Q3 2018

Overall, in the first nine months of 2019, Saipem was awarded new contracts amounting to €13,9 billion compared to €6,1 billion in the first nine months of 2018).

The backlog at September 30, 2019, amounted to €19,8 billion of which €4,7 billion in Offshore Engineering & Construction, €13,745 billion in Onshore Engineering & Construction, €821 million in Offshore Drilling and €492 million in Onshore Drilling), of which €1,9 billion is to be realized in 2019.

Looking ahead, Saipem said that high volatility in the oil price and the persistently low level of new investments by the oil companies will continue to characterize the last part of this year.

“In the first nine months, some important Final Investment Decisions (FIDs) in the gas segment contributed significantly to the high level of contract awards. The backlog at the end of September 2019, combined with forecasts for current commercial tenders, allows us to forecast revenues of around €9 billion for 2019, with adjusted EBITDA margin above 10%,” Saipem said.

Offshore Energy Today Staff

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