Subsea 7 working through backlog but expecting more awards in 2018Company News // November 10, 2017
Subsea 7 says the subsea market is picking up, slowly, and early 2018 could see more contracts awarded.
Describing the company’s third quarter, Jean Cahuzac, Subsea 7's CEO, said “Strong execution and continued focus on cost control in all three of our business units drove good financial performance for the group in Q3.
“Our actions to strengthen and grow our business have diversified our income by adding significant new revenues in the conventional and renewables market segments. Our project portfolio composition is changing as we complete the remaining subsea, umbilical, risers and flowlines projects that were awarded prior to the downturn.
“Major awards to market in the last three years have been more price-competitive and relatively few in number. As a result of the change in our mix of activity, our adjusted EBITDA percentage margin has begun to decline from the exceptionally high levels reported since the second half of 2015.
“Our differentiated service offering, collaborative approach and early actions to reduce costs have enabled our clients to sanction and award several offshore projects despite the lower oil price. Although the market environment remains challenging, we are seeing a gradual recovery in tendering activity and continue to expect the number of awards to the market to increase in H1 2018.”
In the third quarter of 2017 Subsea 7 had an adjusted EBITDA margin of 24 per cent, which reflected the fact that fewer large projects were in the final stages of completion. New awards and escalations of US$538 million contributed to an order backlog of US$5.3 billion.
The company said effective fleet management resulted in an active vessel utilisation level of 78 per cent.