Subsea 7 (SUBC: OSLO) is planning a $100 million windfall for shareholders in 2022 as it firmly believes “the market recovery is underway”.
The energy services giant’s board said the cash will partly come through $70 million of share buybacks.
It also proposes that a regular annual dividend of NOK 1.00 per share, equivalent to $33m, is approved at its annual general meeting on April 12.
Reporting its full-year 2021 results, Subsea 7 said its Subsea and Conventional business experienced increased activities amid the early stages of recovery for the oil and gas sector.
Meanwhile its renewables business “continued to make progress” despite supply chain issues globally linked to Covid-19.
Chief executive John Evans said: “We firmly believe that the market recovery is underway, supported by high levels of tendering in both business units, and with signs of improving pricing and payment terms for new awards.
“We are confident that our strong pipeline of prospects will translate into new orders during the coming year.”
The returns for Subsea 7 shareholders come as the firm reported revenues of more than $5 billion in 2021, up from $3.4bn the prior year.
Pre-tax profits totalled $100.7m, reversing losses of more than $1 billion in 2020.
Subsea and Conventionals took revenue in the fourth quarter of $1.0 billion, up 34% on Q4 2020, pointing to work including the Penguins redevelopment in the UK North Sea, Sangomar in Senegal and Barossa in Australia, among others.
Renewables revenue was $326m, up from $234m in Q4 2020. The firm said the increase was due to increased activity particularly on the Seagreen wind farm off Scotland, the Yunlin project in Taiwan and Hollandse Just Zuid in the Netherlands.
Mr Evans added: “Subsea 7 delivered a solid operational and financial performance in 2021 supported by an improving market, and enabled by work practices that have been adapted to the ongoing challenges posed by the Covid-19 pandemic.
“Our Subsea and Conventional business experienced an increase in activities associated with the early stages of a recovery in the oil and gas industry, including a sharp upturn in tendering activity and greater demand for our engineering services.
“Our Renewables business, which proved somewhat more resilient during the global economic downturn of 2020, continued to make progress although issues largely related to Covid-19 delayed certain projects in Taiwan. During the year, a new challenge emerged as global supply chains tightened across many industries. Subsea 7 continued to mitigate the majority of its exposure through a variety of mechanisms including back-to-back supplier contracts and index-linked pricing.”