Subsea 7 remains in red despite higher revenues

UK subsea engineering, construction and services company Subsea 7 recorded a loss during the first quarter of the year while its revenues increased driven by its SURF and Conventional business unit.

Subsea 7’s net loss remained nearly flat totaling $19 million in the first quarter 2019 compared to the net loss of $18 million in the same period last year.

In 1Q 2019, the entire net loss was attributable to the parent company’s shareholders compared to $10 million in the prior year period.

The subsea company recorded an increase in revenues during the first quarter of the year which totaled $859 million compared to $809 million in the corresponding quarter of 2018.

The higher revenue in the SURF and Conventional business unit compared to the prior year period more than offset the significantly lower revenue in the Renewables and Heavy Lifting business unit, which declined due to the substantial completion of the EPIC Beatrice wind farm project in 2018.

Total vessel utilization was 68% in the quarter, 16 percentage points higher than the prior year period partly due to higher levels of Diving Support and Inspection, Repair and Maintenance (IRM) activity. There were 34 vessels in the fleet at the quarter end following the acquisition of a DSV, Seven Pegasus, in January.

At the end of March 2019, the company’s order backlog of $5.2 billion included new awards and escalations totaling $1.1 billion.

‘Positive outlook’ 

According to the company, the outlook for offshore oil and gas project awards remains positive with a steady improvement in tendering and award activity in the market, including progress on several large greenfield projects. Subsea 7’s pricing on new tenders has started to improve from a low level and over time is expected to return to more normal levels. There is a good level of tendering activity for offshore wind farms.

Subsea 7’s guidance for the full year 2019 has been updated. Revenue is now expected to be broadly in line with 2018, Adjusted EBITDA is still expected to be lower and net operating income is expected to be positive.

Offshore Energy Today Staff

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