Saipem continues turnaround with ‘new contracts and growth in margins’

Saipem is continuing its bounceback from the troubles of last year after the company unveiled its latest set of financials.

Publishing its second quarter results late on Wednesday, the Italian contractor (MIL: SPM) revealed pre-tax profits for the first half of 2023 of €118 million.

A reversal of the €56m in losses it posted in the first six months of 2022, Saipem is tipping its good fortunes to continue, “with the acquisition of new contracts, and growth in revenues and margins”.

Turnover for H1 2023 hit €5.3m, up from €4.2m in the corresponding period of last year, while adjusted EBITDA swelled from €263m to €410m year-on-year.

Order intake for the period was €6.7 billion, more than double the amount or sales the company logged in the first six months of 2022.

Over 80% of those new contracts was in Saipem’s offshore business, specifically engineering and construction and drilling.

The result is a €1bn increase in the Milan-listed group’s consolidated backlog, compared to December 31, 2022.

© Saipem

Listed among Saipem’s “most significant new contracts” for the second quarter is the deal to remove EnQuest’s Thistle A platform, located in the UK North Sea some 125 miles north-east of Shetland.

The company’s activities consist of the engineering, preparation, removal and disposal of the jacket and topsides, with possible extension to further subsea structures.

In order to complete the work the group will deploy the mammoth Saipem 7000 heavy lift vessel.

On the comeback

Having posted a solid set of financials, Saipem’s board will be hoping they are out of the woods after a tough period for the firm.

At the start of 2022 the pressure was piled on former-chief executive Francesco Caio when a surprise profit warning sent the oilfield services firm’s shares to their lowest since 1992.

Eni and Cassa Depositi e Prestiti, the owners of a combined 43% of Saipem, launched a review of their options concerning the company.

It is understood the warning stemmed largely from a huge loss on a contract to supply wind-turbine foundations for the Neart na Gaoithe wind farm, off the east coast of Scotland.

© Supplied by Saipem

A few months later Saipem set out a plan to raise a financing package, and at the end of August Mr Caio resigned with immediate effect.

Industry veteran Alessandro Puliti stepped into replace him as the company attempted to turn its fortunes around.