Subsea 7 S.A. announced results for the first quarter 2012 which ended on 31 March 2012.
Jean Cahuzac, Chief Executive Officer, said:
“I am pleased with our results. We have delivered a good first quarter in line with our expectations. We have also continued to improve the quality of our backlog. These results confirm the momentum that we see in most of our markets as our clients remain very positive with ambitious investment plans.
Our priorities for 2012 have not changed. We remain focused on project execution and disciplined in targeting opportunities that play to our strengths with appropriate margins and returns.
As we commented in March, 2012 will be a year of progress for Subsea 7, and we expect to deliver both revenue and Adjusted EBITDA ahead of the 2011 results.”
Outlook :
As expected, while 2012 will be a year of progress for Subsea 7, it will also be a transition year in Africa due to project timings; Subsea 7 also foresees a high number of planned dry-docks across the year.
In West Africa , the company will move through a period of lower offshore activity in H2 2012 on those projects awarded over the past 18 months. They also expect a number of major SURF contracts to come to market award in the months to come. Given the longer duration nature of these EPIC projects, offshore execution is expected to be late 2013 and predominantly 2014.
In the North and Norwegian Seas , levels of tendering remain very strong with improved pricing for those new projects which will be offshore in 2012 and beyond. Subsea 7 expects to see an improving level of activity in 2012 and improved margins year-on-year reflecting the execution of projects awarded in improving market conditions, together with the completion of most of the remaining lower margin projects awarded in 2010.
In the Gulf of Mexico , they see some increase of activity with contract awards to the market in 2012 with execution late 2013 and 2014 in a market where pricing conditions remains challenging.
In Brazil , the company continues to see opportunities ahead, both in traditional deepwater, as well as the pre-salt developments. Guara Lula remains on track to achieve its revised plans as reported in March 2012.
In Asia Pacific , it expects further gas-driven SURF contracts offshore Australia to come to market award in 2012, albeit with pricing conditions which remain challenging, with associated offshore activity in late 2013 and beyond.
In 2012, Subsea 7 expected a lower total contribution from our joint ventures, following the sale of NKT Flexibles and the rescheduling of significant offshore activity in the SapuraAcergy joint venture into 2013. This is somewhat offset by another strong performance from SHL.
In this growing market, the key challenges for the industry will be the availability of qualified and experienced personnel, managing an increasingly tight supply chain and reliability in complex projects delivery. Subsea 7 is today well positioned to manage these challenges; the engineering and project management capabilities, the size of the fleet and the financial strength position Subsea 7 very well for long term profitable growth.
[mappress] Subsea World News Staff , May 11, 2012; Image: Subsea 7