Saipem: results for the third quarter and nine months of 2021

During the nine months, the adjusted EBITDA is negative for €291 million, which is affected by higher costs for offshore wind activities of 170 million compared to those acknowledged in the accounts as at June 30, 2021. New contracts worth €4.9 billion ensured good visibility in the medium-to-long term, sustained by an adequate financial strength, thanks to the €2 billion liquidity and to the €1 billion unused revolving line. The results are still affected by the still difficult economic situation caused by the pandemic and by the slowdowns of specific projects; however, there are signs of improvements in the drilling sector, with an increase in demand and a possible full utilization of our fleet. The outlook for the second half of 2021 foresees revenues of approximately €4.5 billion, a positive adjusted EBITDA, forecast technical investments worth approximately €250 million and an end-of-year, post-IFRS 16 net financial debt of approximately €1.7 billion. 

San Donato Milanese, October 28, 2021 - The Board of Directors of Saipem, chaired by Silvia Merlo, has approved yesterday the consolidate interim management report of the Group as of September 30, 2021 (not audited).

Highlights of the third quarter and nine months
 

• Third quarter revenues amounted to € 1.9 billion, up to 18% compared to second quarter revenues
• Adjusted EBITDA for the third quarter was negative for 25 million, improved compared to the second quarter of 2021 (negative for 354 million euros)
• In the first 9 months of 2021, revenues amounted to approximately € 5.1 billion (€ 5.4 billion for the first nine months of 2020)
• Adjusted EBITDA for the first 9 months of 2021 negative for 291 million euros (positive for 491 million in the first 9 months of 2020)
• Signs of improvement in drilling with an increase in demand and potential for a full utilization of the fleet
• The operating results reflect a slowdown compared to the first nine months 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 problems in the offshore wind farms 
• New contracts awarded for approximately €4.9 billion in the first nine months, with a book-to-bill near to about 1. 
  Consolidation of an order backlog of approximately €24.5 billion (approximately 78% of the E&C portion not linked to oil), ensuring good performance in the medium-long term
• Net financial debt post-IFRS 16 at September 30, 2021 of around €1.7 billion (around €1.4 billion pre-IFRS 16)
• Liquidity of a €2 billion and a €1 billion unused revolving line
• Outlook for the second half of 2021: 
  • Revenues of approximately €4.5 billion
  • Positive adjusted EBITDA
  • Capital expenditure expected for approximately €250 million, and
  • Net financial debt post-IFRS 16 around €1.7 billion at year end.

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

“The results for the third quarter of 2021 mark a significant first improvement compared to the second quarter of the year in all of Saipem's business divisions, despite the economic situation linked to the pandemic crisis and the difficulties associated with the execution of some projects in offshore wind.  The continuous recovery of drilling volumes and margins and the sequential growth of revenues in the offshore EPC provide concrete indications of improving demand. Attention to working capital and cash flow management remains a key priority and has contributed to an evolution of net debt in line with our expectations despite the payment in the quarter of approximately € 100 million for the resolution of a legal dispute arose in the past years on a specific project, completed time ago”.