Saipem: results for the first quarter of 2020
Highlights
- Strong liquidity and no significant debt maturity prior to 2022 following the early repayment of bonds, ensure flexibility in tackling the deteriorating environment.
- Quarterly financial results with €2.2 billion revenues and 11% adjusted EBITDA margin, supported by operational performance.
- Net debt pre IFRS16 amounted to €632 million euro, in line with expectations.
- Cost reductions have been identified and are underway on many fronts, and capital expenditure has been rephased with a reduction of 20-25% compared to the previous 2020 guidance (withdrawn on April 15, 2020) of around €600 million.
- Impairment and write-down of assets in the Offshore Drilling division of €260 million.
- Solid and diversified backlog of approximately €23 billion (68% not linked to oil), following the record acquisitions in 2019.
- Good outlook for future business opportunities.
Covid-19
The worsening of the economic and financial crisis in the wake of the Covid-19 emergency has caused far-reaching uncertainty and a consequent dramatic and widespread drop in the demand for services which, along with volatile commodity prices, particularly of oil, are leading to a revision of future investment plans, also by our clients.
Despite this deteriorated market context, the operating results for the quarter are robust, thanks to the strengthening of our financial position in recent years, the repositioning of the business towards energy transition, the size and diversification of the backlog and the quality of our assets. These factors, together with the launch of an adequate cost saving program, ensure a solid base for tackling the complexities expected in 2020.
The measures adopted to promptly manage and contain the development of the pandemic, fully protecting the health and safety of our employees, who remain the company’s absolute priority, have allowed us to continue management of ongoing project activities.
Stefano Cao, Chief Executive Officer, commented:
“The successful implementation of a comprehensive transformational strategy over the last few years has allowed Saipem to reach a strong economic and financial configuration with solid assets and no significant short-term debt maturing. We have gained a privileged competitive position having decided, for some time now, to support the energy transition by leveraging on our competencies and innovative technological tools. The resilience, the flexibility and the adaptability proven over many years allow our construction sites and vessels to remain operative, while fully protecting the health and safety of our people, and enable us to firmly navigate the general economically weaker environment, which has justified 2020 guidance withdrawal”.
pdf - 12-2022