Saipem Profits Down, Guidance Maintained

Italian contractor Saipem has reported lower 1Q profits and revenues year on year, but remains in the black.

Latest first quarter net profit was €47mn ($51mn), down from €61mn in 1Q2016, it reported April 21. Revenues were similarly lower at €2.26bn, compared to €2.84bn in the first quarter of 2016. It reported new contracts secured in 1Q2017 of €509mn and said its running orders backlog was €12.47bn.

Saipem CEO Stefano Cao said that markets in 1Q remained tough: “We continue to reinforce the business and to position Saipem for future opportunities. We have strengthened the capital structure, and our new organisational structure will be fully operational during the second quarter.”

It confirmed guidance for 2017 of around €10bn turnover, with net profits of over €200mn inclusive of €30mn reorganisation costs, and net debt of €1.4bn. At end-March 2017 net debt had increased to €1.6bn, from €1.45bn three months earlier.

A year ago Saipem was awarded the contract to lay the offshore section of the Trans Adriatic Pipeline (TAP) project. with work scheduled to have started in 2016. TAP hopes to resume preparations for pipelay onshore Italy in the coming days, following a recent court injunction. TAP is scheduled to begin flowing Azeri gas to Italy in 2020. 

Asked if Saipem was already involved in pipelaying TAP, the company told NGW: "At this stage we are not involved, Saipem's activities will begin when the micro tunnel area will be available and we are interested in making the area available to organise the micro tunnel operations. We are following this project with great care and the laying of the first stone is scheduled in 2018."

The landfall in Italy for TAP at San Foca in Puglia, southeast Italy will be carried out using this micro-tunnelling technology. Such tunneling was used when Saipem handled the contract for a landfall pipe from the offshore OLT Offshore LNG regasification project in Livorno, northwest Italy, for E.On.

Mark Smedley