Italian contractor Saipem has seen profit rise despite tough market conditions.

The company posted earnings for the first quarter of 2015 (ended March 31, 2015) of €77 million, versus €61 million in the first quarter of 2014.

Revenues in the fourth quarter were up, amounting to €3 billion, an increase of 4.5% on the first quarter of 2014 (€2.89 billion).

According to Saipem, turnover was driven mainly by improvements in E&C Offshore and the Drilling segment, which were boosted by good fleet utilization and the appreciation of the USD.

Umberto Vergine, Saipem CEO, commented: “During the first quarter of 2015, despite the negative market environment caused by lower oil prices, Saipem continued its recovery process and its operating results confirm an improving trend.”

Vergine stated that as a result of the projects awarded in 2014, the company can count on a strong and diverse backlog in excess of €21 billion.

“Saipem’s recovery process is yet to be completed. At the same time, new challenges have arisen in the sector, in particular slowing client capex as a result of the current oil-price environment.
However I am confident that Saipem has created a solid basis to enable it to complete its recovery process and return to historic levels of profitability,” Vergine concluded.

During the first quarter of 2015, Saipem secured contracts amounting to €2,399 million (€3,900 million in the first quarter of 2014), reflective of the slower industry investment scenario.

Saipem’s backlog at March 31, 2015 stood at €21,526 million, of which €7,440 million is due to be realised in 2015.

The Company said it expects to achieve revenues of between €12 billion and €13 billion. Furthermore, Saipem noted that a difference of €1 billion in revenue forecast is due to the uncertainties related to the South Stream contract, as the client is still to provide indications as to the future of this project.

Saipem also said it expects net profit between €200 million and €300 million for the year.