Subsea 7 Sees Earnings Grow

Oslo-listed Subsea 7 has booked higher profit for the quarter ended June 30, 2017 as revenues increased on boosted activity in the renewables sector and progress on its SURF projects.

The subsea engineering and construction specialist posted quarterly profit of $146 million, or $43 cents per share, on revenue of $1 billion, versus profit of $136 million, or $40 cents per diluted share on revenue of $960 million same time last year.

Quarterly increase in revenue was boosted by the Beatrice wind farm installation project, while partially offset by lower activity levels within the SURF and Conventional and i-Tech Services Business Units.

SURF and Conventional revenue for the quarter was $614 million, a decrease of $251 million or 29% compared to Q2 2016. For the 1H 2017 revenue decreased $291 million compared to 1H 2016.

i-Tech Services revenue for Q2 2017 was $83 million, a decrease of $10 million or 10% compared to Q2 2016. 1H 2017 revenue was down $37 million compared to 1H 2016.

Revenue for the half-year 2017 was $1.9 billion, an increase of $213 million or 12% compared to 1H 2016. Net income for 1H 2017 was $292 million, or 84 cents per share, compared to $283 million, or 82 cents per share in 1H 2016.

The company also reported adjusted EBITDA of $340 million, and margin of 33 percent compared to $280 million and 29 percent margin in Q2 2016.

“We have made significant progress on our strategy to grow and strengthen our business. Two key acquisitions were completed in the first half of 2017: Seaway Heavy Lifting and EMAS Chiyoda Subsea (ECS). Our acquisition of certain businesses from ECS in June reinforced our position in the Middle East. As a result, we look forward to working in consortium with L&T Hydrocarbon Engineering to provide services to Saudi Aramco under a long-term agreement,” said Jean Cahuzac, CEO.

Subsea 7’s order intake was $141 million for the quarter. The company said its order backlog at the end of June 2017 was $5.7 billion (ECS share $856 million), of which $2 billion is expected to be executed in 2017.

Subsea 7 now expects its revenue to be higher than 2016, due to the consolidation of certain businesses of ECS which were acquired in June. Adjusted EBITDA percentage margin is still expected to be below 2016 levels.

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