Engineering and construction specialist Subsea 7 has seen profit cut by close to 32 percent in the quarter ended September 30, 2018 on lower project pricing secured during the downturn and activity drop in renewables and heavy lift business units.
The Oslo-listed firm posted quarterly profit of $76 million, or $23 cents per diluted share, on revenue of $1.08 billion, versus profit of $111 million, or $35 cent per diluted share on revenue of $1.06 billion in the comparable period in 2017.
The bottom line was also affected by taxation charge of $34 million in the quarter, against $12 million in Q3 2017. Subsea 7 has also recognised unfavorable foreign exchange movements of approximately $50 million during the quarter.
The company reported adjusted EBITDA and adjusted EBITDA margin for the quarter of $217 million and 20 percent respectively, against $250 million and 24 percent in Q3 2017.
The above mentioned year-on-year revenue increase of $19 million was, as in the previous quarter, due to higher activity levels in the SURF and Conventional business units, partially offset by lower activity levels in the Renewables and Heavy Lifting.
“Our total vessel utilisation was the highest it has been since 2014,” said Jean Cahuzac, CEO of Subsea 7.
Active vessel utilisation was 89 percent, up 11 percentage points from the prior year period and 9 percentage points higher than in the second quarter.
SURF and Conventional revenue for the quarter was $865 million, up $111 million compared to Q3 2017.
i-Tech Services revenue for Q3 2018 was $66 million, a decrease of $11 million or 27 percent from the corresponding period in 2017.
Revenue for the Renewables and Heavy Lifting division was cut almost 35 percent at $152 million in Q3 2018, versus $232 million same time last year.
“The next wave of large EPCI wind farm projects are not expected to be awarded until 2019,” said Cahuzac.
Order backlog was $5.1 billion ($4.3 billion SURF and Conventional), with order intake totaling $0.8 billion.
Cahuzac added that the company will continue to focus on cost discipline and efficiency while preparing for the future increase in activity related to the larger greenfield projects that are now being tendered and awarded,”
Subsea World News Staff