Subsea 7 anticipating gradual improvement in the marketNews // July 26, 2017
Subsea 7 has announced results for the second quarter and first half of 2017 which ended 30 June 2017 and says market conditions are gradually improving, with awards to market expected to increase by the first half of 2018.
In the second quarter Subsea 7 acquired certain businesses of EMAS Chiyoda Subsea (ECS) from Chapter 11, accelerating growth plans in the Middle East.
New awards and escalations totalled US$141 million; acquired ECS contracts added $856 million, order backlog totalled $5.7 billion at end June 2017.
Adjusted EBITDA of US$340 million, at a margin of 33 per cent, reflected excellent execution and continued cost discipline. Net cash totalled US$825 million; a US$200 million share repurchase programme was extended to July 2019.
Jean Cahuzac, Chief Executive Officer at the company, said: "We have made significant progress on our strategy to grow and strengthen our business. Two key acquisitions were completed in the first half of 2017: Seaway Heavy Lifting and EMAS Chiyoda Subsea (ECS). Our acquisition of certain businesses from ECS in June reinforced our position in the Middle East. As a result, we look forward to working in consortium with L&T Hydrocarbon Engineering to provide services to Saudi Aramco under a long-term agreement.
"In July, after the quarter end, we were awarded extensions on three of our long-term contracts for PLSVs offshore Brazil. These extensions were awarded at the same day rates and on the same commercial terms as the original contracts.
"Our good execution and continued focus on cost efficiency have driven another quarter of excellent results. Our adjusted EBITDA margin exceeded expectations, as our projects progressed well and we controlled costs. As our mix of projects evolves we do not expect to sustain this exceptional margin performance. Our full-year guidance for a lower percentage margin remains unchanged."