Oilfield services and drilling giant Saipem has reduced the red ink on its bottom line due to lower impairments.
Third quarter profits were boosted to 78million euros, up from a loss of 1.7billion euros in the same period last year.
Topline revenues stayed largely flat at 2.3billion euros, compared to 2.6billion euros last year.
Last year Italy’s Saipem was hit with write-downs and reorganisation costs of 2.3 billion euros, which heavily influenced the firm’s finances for the year.
Chief executive Stefano Cao said: “2016 was a pivotal year for Saipem’s recovery.
“All of the measures required to ensure the deconsolidation of the company from Eni were completed and, at the same time, those needed to deal with the difficult market context, which in 2016 saw write-downs and a further significant rationalisation of the asset base, were put in place.
“I recall in this regard the share capital increase, the debt refinancing and the first bond issue. And at the end of the year we managed to repay the bridge-to-bond
facility in advance. Adjusted EBIT for 2016 and net debt at December 31, 2016 were both in line with the guidance provided.
“Our renewed financial solidity, together with a robust and diversified order backlog, good operational performance, an aggressive cost-cutting plan and a streamlining of processes pursuant to our “Fit for the Future” programme, leads us to look with confidence to the future recovery of the Oil & Gas services market and confirm the targets for 2017 in a market context which, however, remains challenging.
“The new organisational model announced last October, which will be fully implemented beginning in May this year, will allow us to improve our offer to our clients in a more structured way addressing their needs effectively.”
The management outlook for 2017 said the market is “still challenging” particularly in the offshore sectors and onshore in Latin American operations.
But the firm said awarding of new contracts in the third quarter suggested good visibility in the short term.
The backlog of orders at September 30 was 4.8billion euros.
The most significant awards in the third quarter included for Engineering, Procurement, Construction and Installation (EPCI) activities in relation to the ramp up of the “supergiant” Zohr Field off the Egyptian coast.
The firm was also awarded work on behalf of Eni Angola, in relation to the West Hub Development project in Angola and on behalf of Eni Ghana Exploration & Production Ltd., in Ghana, a contract encompassing the engineering, procurement and construction of the infrastructures needed to boost the capacity of the gas stations situated in the vicinity of the ports of Takoradi and Tema.
Saipem is also involved in the contract for the construction of the last section of the pipeline crossing the Baltic Sea and the shore approach in Greiswald, Germany.
The offshore drilling sector of the firm was hit with a 33.9% contraction in activity levels.
Three jack up rigs remained out of action as they were not under contract. Two semi-submersibles were also not under contract.
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