Italian contractor Saipem has seen profits drop by some 29 per cent on tough market conditions.
The company posted earnings for the third quarter of 2015 (as at September 30, 2015) of €54 million, versus €76 million in the third quarter of 2014.
Revenues in the third quarter were down, amounting to €3.07 billion, a decrease of 12.2% on the first quarter of 2014 (€3.50 billion). The Company said it expects to achieve revenues of approximately €12 billion for the full year.
According to Saipem, turnover was driven mainly by improvements in onshore E&C Offshore and the Drilling segment.
During the quarter, Saipem secured contracts amounting to €1.85 billion, esentially flat compared to the corresponding period in 2014.
Saipem’s backlog at September 30, 2015 stood at €17.75 billion, of which E&C offshore contracts in excess of €600 million were not included.
Stefano Cao, Saipem CEO, commented: “Saipem results for the third quarter of 2015 were in line with the same period of 2014, despite the deeply deteriorated market scenario.
“This was achieved as a result of an improvement in the Onshore E&C segment, which returned to breakeven, coupled with the relative stability of the Drilling segment.
“The encouraging results achieved in the third quarter allow us to confirm the guidance announced to the market at first-half results.”
Net debt at September 30, 2015 was about €5.73 billion. Saipem informed it will be seeking for up to €3.5 billion of fresh capital to help the company adjust to the market. In addition, Italian oil & gas maojr, Eni, which held 43% in Saipem, has agreed to sell 12.5% of its stake to Fondo Strategico Italiano.
“The capital raise of up to €3.5 billion, strongly supported by Eni and Fondo Strategico Italiano, will bring our net debt back in line with our peers, at a level which I believe will secure an investment grade credit rating and therefore obtaining a competitive rate for the refinancing of €3.2 billion of outstanding debt. This provides a strong financial platform on which to build Saipem’s future,” Cao said in a press statement.