Subsea 7 S.A. (the ‘Group”) announced results for the third quarter which ended on 30 September 2013. Unless otherwise stated, the comparative period is the nine months ended 30 September 2012.
Jean Cahuzac, Chief Executive Officer, said:
‘We have delivered good financial results and are on track to deliver full-year Adjusted EBITDA in line with consensus expectations. These results reflect high offshore activity, project phasing in West Africa and high vessel utilisation in the North Sea.
Adverse weather conditions have continued to hamper progress on the Guará-Lula NE project but we believe that the full-life project loss previously announced in June remains appropriate. We continue to be satisfied with our performance in executing our remaining project portfolio.
We have achieved a record backlog of $11.8 billion which includes the award of three 5 year contracts for new-build PLSVs in Brazil. We remain focused on building quality backlog with the appropriate risk profile.”
Operational highlights and outlook
Good progress was made on a number of projects in the North Sea including Otter, Knarr and Laggan Tormore. Engineering and procurement continued for Martin Linge, which will move into the offshore phase in 2014. The quarter benefited from strong project execution and high vessel utilisation.
In Africa, the quarter benefited from high activity levels and the timing of settlements with clients. Offshore Angola, Seven Borealis completed its main offshore workscope on CLOV, a project executed as expected with a low margin. Good progress was made on the engineering and procurement for the Lianzi SURF project which will move into the offshore phase in the second part of 2014. Offshore Nigeria, strong execution on the MPN Trunk project continued and good progress was made on the engineering and procurement for the Erha North project. Seven Borealis mobilised to Mexico during the quarter and has subsequently completed the Line 60 project.
In Asia, Sapura 3000, owned by the SapuraAcergy joint venture, successfully completed the offshore scope of the Gumusut project offshore Malaysia. In Australia, progress was made on the Gorgon Heavy Lift and Tie-Ins project with offshore installation scheduled to commence in Q4 2013.
In Brazil, we continue to collaborate closely with Petrobras to complete the challenging offshore phase of the Guará-Lula NE project. In October 2013, we successfully renewed the contracts for Seven Mar and Seven Condor, which completes the contract renewal programme for our existing fleet of five pipelay support vessels.
The level of tendering continues to be good in the North Sea but has moderated elsewhere as delays in project awards remain a feature of the industry. Some North Sea operators have indicated that rising costs could result in the award of new projects being postponed.
Although we have not seen a clear pattern develop, this is something which requires monitoring as it could have a short-term impact on activity levels. The fundamentals of our business have not changed and we remain positive about the medium and long-term market prospects.
Press Release, November 18, 2013