Subsea 7 earnings up in Q1 2021

Subsea 7 has reported an adjusted EBITDA increase of 50 per cent in the first quarter of 2021, to $102 million, compared to $68 million from the same period in 2020.

According to Subsea 7, the mentioned boost is driven by progress on Subsea and Conventional projects, high utilization of the PLSVs, and activities on the Seagreen offshore wind project, partially offset by a high level of vessel transit time.

The UK-headquartered company saw a revenue of almost $1 billion, representing a 33 per cent rise from $751 million in Q1 2020.

This is said to be a reflection of significantly higher activity in Renewables and moderate growth in the Subsea and Conventional business unit as projects deferred from 2020 into 2021 made progress.

The backlog amounts to $6 billion, of which 30 per cent in Renewables, with $3.4 billion to be executed this year.

After a depreciation and amortization charge of $110 million, Subsea 7 recorded a net operating loss of $9 million. Net income for the quarter was $1 million.

Capital expenditure was $24 million including costs relating to the conversion of Seaway Phoenix for cable laying, as well as dry docking costs associated with Seven Falcon.

“Although we experienced a relatively quiet quarter for announced new orders, the Group’s backlog remains robust at $6 billion and tendering activity for oil and gas projects has improved in certain regions of the world, with several contracts expected to be awarded to the industry in the coming months,” said Subsea 7 CEO John Evans.

“Our high Renewables backlog adds to our revenue visibility and demonstrates the advantage of a diversified energy services strategy. We look ahead with optimism to a recovery in new order flow in our oil and gas business as well as continued, strong growth in our well-established offshore wind business.”

For the remainder of 2021, Subsea 7 believes it will benefit from a high level of visible activity afforded by its backlog, but quarterly results may be adversely impacted by the net costs associated with the Covid-19 pandemic.

However, the UK player expects revenue to exceed the 2020 level, with adjusted EBITDA to improve and net operating income to be positive.