Subsea 7 S.A. Fourth Quarter and Full Year 2010 Results Announced (UK)

Subsea 7 S.A. (formerly Acergy S.A.) announced results for the fourth quarter and fiscal year 2010. The combination between Acergy S.A. and Subsea 7 Inc. completed on January 7, 2011. Upon completion, Acergy S.A. was renamed Subsea 7 S.A.

Jean Cahuzac, Chief Executive Officer, said: “Both Acergy and Subsea 7 delivered strong financial and operational results in 2010. The combination of the two businesses positions us fully to capture future growth opportunities in the global seabed-to-surface market. With a combined backlog of $6.4 billion and an industryleading fleet of 42 vessels supported by extensive fabrication and onshore facilities, we believe we are positioned to deliver enhanced long-term value for all stakeholders. Merger integration continues on track and we are particularly pleased with our progress toward the targeted synergies. We look forward to updating you in greater detail on the new Group at our combined first quarter results presentation.”

Fourth Quarter 2010

Revenue from continuing operations for the fourth quarter was $717 million (Q4 2009: $622 million) primarily reflecting strong activity levels in West Africa and the North Sea, partially offset by lower activity levels in Brazil and Asia Pacific.

Gross profit was $232 million (Q4 2009: $167 million) reflecting strong project execution across the portfolio and project settlements, partially offset by lower vessel utilisation. Administrative expenses were $93 million (Q4 2009: $67 million) reflecting higher tendering costs, higher professional fees arising from the combination with Subsea 7 Inc., and costs arising from legal restructuring and organisational optimisation.

The Group’s share of results of associates and joint ventures was $15 million (Q4 2009: $14 million) reflecting a strong contribution from SapuraAcergy and a good, albeit lower, contribution from NKT Flexibles. This was partially offset by a small loss from Seaway Heavy Lifting arising from Stanislav Yudin being in planned drydock for the quarter.

The Adjusted EBITDA margin from continuing operations for the three months was 25.0% (Q4 2009: 26.3%).

The Adjusted EBITDA margin from total operations for the three months was 28.9% (Q4 2009: 25.9%), reflecting the successful settlement on the Mexilhao Project.

Other losses were $6 million (Q4 2009: gains of $13 million) primarily reflecting foreign exchange losses on short-term inter-company balances arising from the weakening US dollar.

Income before taxes from continuing operations for the fourth quarter was $139 million (Q4 2009: $119 million) reflecting the increase in revenue from higher activity levels in West Africa and the North Sea, strong operational performance and a good contribution from associates and joint ventures, partly offset by higher administrative expenses.

Taxation for the quarter was $45 million (Q4 2009: $40 million) reflecting an effective tax rate for the quarter of 32% (Q4 2009: 34%) as a result of the current geographical portfolio mix.

Income from continuing operations for the fourth quarter was $94 million (Q4 2009: $79 million). Net income from total operations for the fourth quarter was $124 million (Q4 2009: $81 million).

The cash and cash equivalents position at the quarter end was $484 million (Q3 2010: $548 million). The decrease primarily reflected the acquisition of Pertinacia. Deferred revenue at the quarter end stood at $218 million (Q3 2010: $283 million).

At quarter end, Subsea 7 S.A. held indirectly 10,431,762 treasury shares representing 5.35% of the total number of issued shares. In addition, 583,000 are held in an employee benefit trust to support the 2009 Long- Term Incentive Plan. Total shares in issue were 194,953,972, including treasury shares.

Fiscal Year 2010

Revenue from continuing operations for the fiscal year was $2,369 million (2009: $2,209 million) reflecting strong activity levels in West Africa, good activity levels in the North Sea, partially offset by lower activity levels in Brazil, Asia Pacific and the Gulf of Mexico.

Gross profit for the fiscal year was $668 million (2009: $525 million) reflecting higher activity levels and strong project execution across the portfolio, partially offset by lower vessel utilisation.

Administrative expenses for the fiscal year were $307 million (2009: $231 million) reflecting higher professional fees arising from the combination with Subsea 7 Inc., ongoing legal restructuring and organisational optimisation and higher tendering costs.

The Group’s share of results of associates and joint ventures for the fiscal year was $75 million (2009: $49 million) reflecting strong contributions from Seaway Heavy Lifting and SapuraAcergy, and a good albeit lower contribution from NKT Flexibles.

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Source: subsea7 ,February 23, 2011;