Saipem: results of the first half of 2021

Highlights of the first half-year

• Revenues of approximately €3.2 billion and adjusted EBITDA at a loss of €266 million. Operating results, reflect a slowdown compared to the first half of 2020, especially for the engineering and construction activities, mainly due to:
  • continued effects of the Covid-19 health crisis on operational activities, with the delays in project execution and the postponement of investment decisions in the sectors of interest
  • suspension of LNG onshore project activities in Mozambique
  • specific operational issues of an offshore wind project in the North Sea
• Signs of improvement in drilling with an increase in demand and potential for a full utilization of the fleet
• New contracts for approximately €4.4 billion in the half year. Consolidation of a backlog of approximately €26.2 billion (approximately 78% of the E&C portion not linked to oil), supporting performance in the medium-long term
• Net debt post-IFRS 16 at €1.4 billion (around €1.1 billion pre-IFRS 16), slightly reduced compared with the first quarter, as a result of the accurate management of cash flows
• Cash and cash equivalents at €2.3 billion following the 7 years €500 million fixed rate bond successfully issued in March 2021 and thanks to the significant cash availability of the consolidated companies and of the project joint ventures
• Availability of the fully undrawn €1 billion revolving credit facility
• Launch of transformation initiatives to ensure a new phase of sustainable growth:
  • review of the business strategy ahead of the new Strategic Plan
  • review of the operating model
  • simplification of processes
  • reduction of operating leverage
• To date, 84 initiatives have been identified for total estimated annual run rate of savings of approximately €100 million
• Presentation next autumn of the new Strategic Plan
• Outlook for the second half of 2021:
  • revenues of between €4.5 and €5 billion
  • positive adjusted EBITDA
  • capital expenditure expected between €200 and €300 million and
  • net debt post-IFRS 16 around €1.6 billion at year end

Commenting on the results, Francesco Caio, CEO and General Manager of Saipem said: 

“Saipem has the resources, the skills and the relationships with clients that enable us to plan the near future with a view to profitable growth, even in a challenging context which is still characterised by the uncertainties deriving from Covid-19.
The specific factors which have affected financial results do not alter the Company’s structural strengths on which I intend to build – with the contribution of the outstanding professionals working in the Group - an increasingly competitive Saipem.
With this perspective, I have launched a programme to simplify and focus our operations. Specific initiatives have already been identified yielding a potential yearly run rate saving of approximately 100 million euro; we will provide updates to the market. The order intake and the growing utilization of the drilling fleet represent further positive factors on which we can leverage for a renewed competitiveness, starting from a return to a positive EBITDA in the second half of the year. I have also started a strategic review for a new plan which I intend to present next autumn.
Concrete opportunities for growth are emerging on three fronts. 
The first one is in our core business, where signs of a new investment cycle are strengthened in regions where Saipem has a consolidated presence, such as Middle East. 
The second one is in energy transition, where Saipem is already active in industrial projects in renewables, biofuels and CO2 capture and it is expanding its technological portfolio through acquisitions, such as Naval Energy in floating wind, and through joint ventures established in green hydrogen sector and, with Versalis, in bioethanol process. 
The third front is in Italy, where the NRRP (National Recovery and Resilience Plan) is opening a season of new investments in sustainable infrastructures, in the energy field and in high-speed railways, a sector where Saipem has a significant track record in sections of the national network and where we are presently working on the Brescia-Verona link. 
These are opportunities we want to seize to consolidate Saipem’s presence worldwide and the role we play in our Country, creating value for the local communities through a sustainable approach across all of our businesses”.