Subsea 7 boss 'positive' as tendering picks up, but pre-tax profits slide

Subsea 7’s boss said today that the energy services giant was participating in more tenders and that his outlook for core markets was “positive”.

Chief executive Jean Cahuzac said the offshore oil and gas sector continued its recovery, aided by low cost services provided by companies like Subsea 7.

Mr Cahuzac was speaking after Subsea 7 revealed its first half results and a new £160 million share repurchase programme, supported by the improving oil market.

The firm is registered in Luxembourg and employs about 1,000 people in north-east Scotland.

First-half adjusted earnings before interest, tax, depreciation and amortisation dipped 2.4% to £225m, on revenues of £1.4 billion, down 7.7% year-on-year.

Pre-tax profits plummeted 89% to £5.7m, due to lower net operating income, net foreign currency losses of £25m, and changes to reporting standards for leases.

Subsea 7 said the performance of its subsea umbilicals, risers and flowlines business had been steady in the first half of 2019.

But revenues for its renewables and heavy lifting division sank 76% to £82.5m, primarily due to reduced activity on the Beatrice wind farm project, offshore UK, which is operationally complete.

The business had a £3.7bn order backlog at the end of June, buoyed by £316m of new awards and escalations in the second quarter.

Mr Cahuzac said: “The recovery in offshore oil and gas continues to make steady progress as lower cost solutions for offshore developments service the growing global demand for energy.

“Our market-leading technology and engineering expertise applied to integrated and standalone developments enable us to support our clients as they sanction and develop their projects.

“We are working with our clients and alliance partners from the early stages of the field life cycle, and the number of tenders and early engineering studies we are engaging in continues to grow.

“We are positive on the outlook for our markets. We have a modern and versatile fleet, strong portfolio of proprietary technology and teams of highly capable people able to deliver complex solutions efficiently, reliably and safely.

He added: “The new share repurchase programme announced today reflects our confidence in the gradually recovering market, our secure financial position and the diminishing capital investment needs of our business in the medium-term.”

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