With $2.8 billion in revenue so far, Subsea 7 expects to meet full-year 2023 expectations
Subsea 7’s revenue for the first half of 2023 was $2.8 billion, a $323 million or 13 per cent increase compared to the first half of 2022, said to be due to significantly increased activity in the Subsea and Conventional business unit partly offset by lower revenue in the Renewables business unit.
For 1H 2023, adjusted EBITDA was $268 million resulting in an Adjusted EBITDA margin of 10 per cent, an increase of $49 million or 22 per cent compared to 1H 2022. The increase was driven by higher adjusted EBITDA in the Renewables business unit partly offset by a lower contribution from the Subsea and Conventional business.
Net operating loss was $14 million, compared to a net operating loss of $13 million in the prior year period.
In the Subsea and Conventional unit, revenue was $2.2 billion, an increase of $379 million or 20 per cent compared to the prior year period, reflecting higher activity levels, while in the Renewables unit revenue was $468 million compared to $526 million in the prior year period.
Corporate revenue, which was mainly driven by the company’s autonomous wholly-owned subsidiaries Xodus and 4Subsea and floating wind activities, was $54 million, an increase of $2 million compared to the prior year period.
Vessel utilization for the first half of 2023 was 76 per cent, a slight increase from 75 per cent for 1H 2022.
In the second quarter of 2023, revenue of $1.5 billion increased 22 per cent compared to the second quarter of 2022. Adjusted EBITDA of $162 million equated to an adjusted EBITDA margin of 10.7 per cent, in line with the prior year period.
According to Subsea 7, this reflected an increased contribution from Renewables – with a return to a double-digit adjusted EBITDA margin – offset by lower margins in Subsea and Conventional where the mix of activity is currently skewed towards projects won in a challenging environment in 2020 and 2021.
Vessel utilization was 85 per cent compared to 77 per cent for Q2 2022. On 30 June, there were 40 vessels in the company’s fleet, comprising 38 active vessels and two vessels under construction.
Order intake in Q2 was $2.2 billion. On 30 June, backlog was $10.4 billion compared to $9.7 billion on 31 March 2023, of which $3 billion will be executed in 2023 and $4.3 billion in 2024.
“Subsea7 delivered satisfactory financial results for the second quarter of 2023 reflecting a good operational performance in Subsea and Conventional and a strong result in Renewables,” said John Evans, Subsea 7’s CEO.
“The Group is on track to meet adjusted EBITDA expectations for the full year 2023, and the strong backlog, combined with the current positive dynamics in project tendering, gives us confidence that the group Adjusted EBITDA margin will return to a range of 15-20% over the coming four years.”
Subsea 7 said it continues to expect revenue and adjusted EBITDA in 2023 to be higher than 2022, with a weighting towards the second half of the year, and that pricing and contract terms showed continued positive momentum during the second quarter.