Italy: Saipem Reports Record Results in First Nine Months 2011

The Board of Directors of Saipem S.p.A. approved Saipem Group’s Interim Report as at September 30, 2011.

Investments in the third quarter of 2011 amounted to Euro 257 million (Euro 371 million in the third quarter of 2010) and included:

– Euro 76 million in the Offshore Engineering & Construction sector mainly relating to the construction of a new pipelayer (CastorOne), the completion of a tanker conversion into an FPSO unit, the development of a new fabrication yard in Indonesia, and the maintenance and upgrading of the existing asset base;

– Euro 12 million in the Onshore Engineering & Construction sector on maintenance of the existing asset base;

– Euro 127 million in the Offshore Drilling sector, mainly relating to the completion of the deepwater semi-submersible rig Scarabeo 9 and continuing construction works for the semi-submersible rig Scarabeo 8, in addition to the maintenance and upgrading of the existing asset base;

– Euro 42 million in the Onshore Drilling sector mainly relating to the purchase of a new rig due to operate in Saudi Arabia, in addition to the upgrading of the existing asset base.

Investments in the first nine months of 2011 amounted to Euro 818 million (Euro 1,153 million in the first nine months of 2010).

The latest delivery schedule for major ongoing investments is as follows:

Drilling: the Keppel Shipyard (Singapore) handed over the semi-submersible drilling rig Scarabeo 9 on August 26.. Following the successful completion of acceptance tests required by the Client, the rig is now en route to the Caribbean Sea where it is due to arrive by the end of December. The semi-submersible drilling rig Scarabeo 8 is due to leave the Westcon Shipyard in Norway and start sea trials towards the end of the year; sea trials and acceptance tests are expected to take approximately two months.

Engineering & Construction: FPSO Aquila was transferred to the Adriatic Sea and is currently being installed on Eni’s Aquila field. The fabrication yard in Karimun (Indonesia) has already started fabrication on behalf of Clients, and will continue in parallel with work for the yard completion during the latter part of the year. The pipelayer CastorOne is due to be completed at the Keppel Shipyard (Singapore) by the end of June 2012. CastorOne will undergo sea trials in the second half of 2012.

As advised in the press release of October 10, 2011, Saipem acquired TPG (Terminal Portuário de Guarujá S.A.), a company which fully owns, as a perpetual concession, an area of 35 hectares in Guarujá, within the industrial hub of Santos, in the state of São Paulo (Brazil); Saipem will develop the area through the construction of a fabrication yard for subsea and floating structures, which will be used in the development of Brazilian offshore fields.

Net financial debt at September 30, 2011 amounted to Euro 3,323 million, a slight increase from December 31, 2010 (Euro 3,263 million): considerable cash flow generated during the period enabled to offset almost all expenditure, consisting mainly of capex and dividend distribution.

New contracts and backlog

During the third quarter of 2011, Saipem was awarded contracts amounting to Euro 2,771 million (Euro 2,564 million in the third quarter of 2010).

New contracts awarded to the Saipem Group during the first nine months of 2011 amounted to Euro 8,777 million (Euro 9,623 million in the first nine months of 2010).

The Saipem Group backlog at September 30, 2011 stood at Euro 20,101 million (Euro 6,202 million in the Offshore Engineering & Construction sector, Euro 9,543 million in the Onshore Engineering & Construction sector, Euro 4,356 million in the Drilling sectors), of which Euro 2,818 million is due to be realised in the fourth quarter of 2011 and approximately Euro 8,605 million in 2012.

In October 2011, new contracts amounting to approximately USD 1,500 million were awarded in the Offshore Engineering & Construction sector. These relate to contracts detailed in the Press Release of October 17, 2011.

Management Outlook for 2011

Strong volumes and margins recorded in the first nine months of 2011, along with the substantial backlog, underpin expectations of achieving the improved targets for 2011 stated at the end of Q1 (compared to 2010: revenues to increase by approximately 8%, EBITDA by approximately 12% and net profit by approximately 8%). Investments for 2011, inclusive of the expenditure on the new initiative in Brazil, are now estimated to be in the region of Euro 1.2 billion.

More info: Saipem

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Source: Saipem, October 31, 2011