Offshore engineering firm Subsea 7 said yesterday it had a record backlog but warned of several industry challenges which would temper the rate of progress this year.
It said oil price volatility had not dented clients’ plans in recent months, leading to orders of £6.7billion. Oslo-listed Subsea 7 also reported rising turnover and profits for the first quarter, helped by North Sea activity, but said project delays or postponements would hit its 2013 performance.
Its £85million project-management, engineering and fabrication contract for Shell’s Fram field in the UK central North Sea fell through in the quarter after the operator said it was reviewing the development following “unexpected initial drilling results”.
Subsea 7 chief executive Jean Cahuzac said: “Although we have not seen a direct impact from oil price volatility on our clients’ plans and overall tendering activity remains high, in recent months some large industry projects around the world have been postponed for various reasons.”
Supply chain bottlenecks, cost pressures and skills shortages were all listed as further hurdles, but Subsea 7 said it remained positive about its medium and long-term prospects. Turnover in the first quarter was £963million, up marginally on the same period last year. Pre-tax profits were £103million, a 7.5% rise, while operating profits posted a small increase to £101million.
Despite the loss of the Fram contract Subsea 7’s turnover from its North Sea and Canadian operations increased 3% to £391.5million. This was helped by subsea infrastructure work at Total’s Laggan-Tormore project west of Shetland.
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