With the release of Saipem’s first half of 2017 financial results, the Italian contractor has been seen to take some knocks but was said to be positioning itself to meet the market upturn.
Stefano Cao, CEO of Saipem, said, “The rationalisation and strengthening of the newly implemented organizational model continued and should lead to greater efficiency and effectiveness, as well as to a further reduction in operational costs.”
Revenue dropped to €4.59 billion, compared to €5.28 billion in the first half of 2016. Of that, €2.33 billion was attributable to the second quarter of 2017.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) stood at €524 million, down from the first half figure for 2016, which was €669 million. The second quarter of 2017 contributed €268 million to this figure.
Operating profit, or EBIT (earnings before interest and taxes), decreased to €124 million from the €237 million recorded in the same period of the previous year. Of this, €12 million was attributable to the second quarter of 2017.
Net profit fell from €53 million in the first half of 2016 to -€110 million in the same period this year, with the second quarter contributing -€157 million. However, when adjusted for special items, net profit was €92 million, compared to €140 million in the first half of 2016 and €38 million of that was from the second quarter of 2017.
New contracts fell from €3.33 billion in the first half of 2016 to €2.09 billion in the first half of 2017.
The order backlog also declined, from €14.22 billion in December 2016 to €11.72 billion in June 2017. However, Cao said, “Despite the persistence of a difficult market context, the company has good visibility for significant order acquisitions in the near future.”
Net financial debt increased in line with expectations, from €1.45 billion in December 2016 to €1.5 billion in June 2017.
In view of these results, Saipem updated its guidance for 2017. Revenue was expected to reach around €9.5 billion, with EBITDA estimated at €1 billion. The firm speculated that adjusted net profit would come in at around €200 million and net debt would be €1.4 billion.