Subsea 7 Takes Profit Hit

Engineering and construction specialist Subsea 7 has seen profit cut by some 37 percent in the quarter ended December 31, 2018 on activity drop in renewables and heavy lift business units and increased expenses and tax charge compared to the prior year comparable period.

The Oslo-listed firm posted quarterly profit of $32 million, or $12 cents per diluted share, on revenue of $1 billion, versus profit of $51 million, or $17 cent per diluted share on relatively flat revenue in the comparable period in 2017.

The company reported adjusted EBITDA and adjusted EBITDA margin for the quarter of $163 million and 16 percent respectively, against $176 million and 18 percent in Q4 2017. Full-year EBITDA was $669 million / 16 percent, compared to $1 billion / 26 percent in 2017.

Full-year 2018 result was profit of $165 million ($0.56) on revenue of $4.1 billion, against profit of $455 million ($1.36) on revenue of $4 billion.

Total vessel utilisation was 70 percent, up 25 percentage points from the prior year period. Full-year utilisation was also 70 percent, up from 66 percent in 2017.

SURF and Conventional revenue for the year 2018 was $3.2 billion, up $440 million compared to 2017.

Revenue for the Renewables and Heavy Lifting division ($664 million) was cut by 30 percent when compared to 2017.

Order backlog was $4.9 billion, with order intake totaling $0.9 billion.

The company’s guidance for 2019 remains unchanged, with revenue and adjusted EBITDA expected to be slightly lower than in 2018 and net operating income to be positive.

“In 2019 we expect continued pressure on our financial performance from the projects awarded at lower prices during the downturn and from a reduction in our offshore wind farm installation activity. However, offshore activity levels are improving and the projects we are now tendering and winning give us confidence that the expected market recovery will translate into better performance for Subsea 7 in the future,” said Jean Cahuzac, CEO.

Subsea World News Staff