Saipem Backlog Hits ‘New Peak’

(Europe)‘ First Half Results Include 'Significant’ Awards

Oil and gas engineering specialist Saipem has announced a record backlog with "significant" new awards and progress of existing projects supporting a positive outlook.

Reporting its first half result the firm recorded awards of about €4.8 billion, taking its backlog to about €26 billion. New acquisitions equalled 1.3 times half-year revenues, and 2.6 times quarterly revenues.

“Despite the general economic context, heavily penalized by the prolonged health emergency, the execution activities of our projects around the world have progressed ... The backlog – considerably grown even during this difficult period – is solid and the liquidity is substantial, further strengthened by the new bond issue announced at the beginning of July,”said Stefano Cao, CEO of Saipem.

Strengthening Financial Position

The firm reported revenues of about €3.7 billion for the first half, delivering adjusted EBITDA margin close to 10 percent.

“The strengthening of the financial position and assets achieved in recent years, the timely orientation of the business towards energy transition, the size and diversification of the backlog and the suitability of the assets ensure a clear market position to Saipem.

The first half results include write-down of assets of €669 million, with the brunt of impairment mainly in the Offshore Drilling division.

Efficiency Savings

Efficiency initiatives launched in the wake of the Covid-19 pandemic are also expected to deliver significant savings, with an expected contribution of about €190 million in 2020. A rescheduling of capital expenditure will also reduce outgoings, with capital expenditure now expected to be below €400 million.

“The market scenario remains characterised by strong uncertainty about the economic and financial prospects, because of the Covid-19 pandemic still spreading worldwide, and because of the uncertainty for the demand for oil and gas and related services,” the firm notes in its forward-looking outlook.

Headquartered in Italy, Saipem provides onshore and offshore breakbulk transport, drilling services, engineering and installation of pipelines and complex projects worldwide. 

Subscribe to BreakbulkONE and receive more industry stories and updates around impact of COVID-19.