Subsea 7 braces for headwinds; withdraws 2020 guidance

Engineering and construction specialist Subsea 7 has warned of ‘significant headwinds’ as it expects the coronavirus pandemic and sharp drop in oil prices to impact its capacity to meet 2020 guidance.

Subsea 7 has therefore withdrawn its previous guidance and outlook, which saw its revenue and adjusted EBITDA higher than in 2019.

The company reported backlog at year-end 2019 of $5.2 billion, of which $3.3 billion is scheduled for execution in 2020.

However, Subsea 7 said that it is possible that measures taken around the world to contain the virus may impact the company’s ability to execute existing contracts and recognise revenue in 2020.

The company believes it has significant liquidity available to weather these challenges, with $398 million cash and equivalents, as well as undrawn banking facilities of $656 million.

To remind, for the twelve months of 2019 Subsea 7 recognised net loss of $82 million on revenue of $3.6 billion, against profit of $165 million on revenue of close to $4.1 billion compared to the equivalent period in 2018.