Subsea 7 (OSLO: SUBC) has announced its Q1 results, revealing a growing backlog in work since the beginning of the year.
This “sustained high level of demand” from Subsea 7’s clients set the firm up for “strong cash generation”, according to the firm’s chief executive, John Evans.
Mr Evans said: “While this year marks a period of re-investment in both the subsea and renewables businesses, we are confident that our strategy positions the Group for strong cash generation, and the return of excess capital to shareholders, next year and beyond.”
Subsea 7’s backlog stands held a value of £7.78 billion ($9.7 bn) on 31 March 2023, of which £3.21 bn ($4.0 bn) is to be carried out in 2023 and £2.73 bn ($3.4 bn) in 2024.
Recent awards and ongoing bids underpin the company’s confidence in the outlook, this is due to a return of adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margins to a range of 15-20% over the coming four years.
The firm’s EBITA since the beginning of the year stands at around £85.86 million ($107 m).
Subsea 7 lost £23.27m ($29 m) as of 31 March while cutting net operating loss to £12.04 m ($15 m), compared to net operating loss of £24.87 ($31 m) in Q1 2022.
John Evan’s company generated revenues of £999.79 m ($1.246 b).
Mr Evens concluded: “Overall, Subsea7 delivered a satisfactory financial performance in the first quarter and we are confident in the outlook for the remainder of the year and beyond.”
This comes as Subsea 7 hailed an order intake of $7bn for 2022, its largest since 2013.
However, after a $100m tax charge, Subsea 7 saw a flat net income, staying at $36m, the same as 2021.
Subsea 7 said it booked a $36 increase in taxes compared to 2021, driven by an increase in income tax combined with “irrecoverable withholding taxes in certain jurisdictions”.
Before tax, the firm had an income of $136.3m, up from $100.7m in 2021.
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