Saipem suffers H1 loss, launches strategic review
Italian oilfield services group Saipem suffered a €266mn ($316mn) loss in terms of core earnings (adjusted Ebitda) in the first half of the year, the company said on July 30, blaming the result on a slowdown in construction and engineering activity.
The loss compared with €355mn of earnings in the same period last year. Saipem's revenues totalled €3.2bn in the six months ending June 30, down from €3.765bn a year earlier, and the company booked a net loss of €779mn, compared with a loss of €886mn in the first half of 2020.
Saipem's net debt also increased to €1.4bn at the end of June, from €1.23bn six months earlier, although its order backlog also increased to €23.6bn from €22.4bn at the end of December.
Besides the general impact of the COVID-19 pandemic on oil and gas operations, Saipem also attributed its weaker numbers to the suspension of its work at TotalEnergies' Mozambique LNG project, amid a sharp increase in militant attacks in the country, as well as operational issues at an offshore wind farm in the North Sea.
Looking forward, though, Saipem predicts positive adjusted Ebitda in the second half of the year, on the back of €4.5-5.0bn in revenues, as the company's rig utilisation improves. It also expects to bring its net debt down to €1.6bn by year-end.
Saipem CEO Francesco Caio said the firm had identified €100mn/yr in cost savings and launched a strategic review that would be presented in autumn. He saw growth potential for Saipem on three fronts: its core business particularly in the Middle East, notably Qatar; the energy transition where Saipem has already made forays into renewables, biofuels and CO2 capture, and in Italy, which is launching new investments in energy and railway infrastructure as part of its recovery plan.
"These are opportunities we want to seize to consolidate Saipem's presence worldwide and the role we play in our country, creating value for the local communities through a sustainable approach across all of our businesses," Caio said.