Saipem Warns On Profits After Falling To Q2 Loss
MILAN, July 25 (Reuters) – Italy’s Saipem lowered its annual earnings forecasts on Tuesday citing tough market conditions after the oil services company fell to a second-quarter loss.
Saipem said it now expected adjusted net profits of around 200 million euros this year, down from a previous target of 230 million, because of higher financial costs.
It added the forecast did not include the impact of possible one-off items such as asset impairments and tax dispute settlements.
The company, jointly controlled by oil major Eni and state-lender fund FSI, lowered its revenue target to around 9.5 billion euros ($11 billion) from a previous estimate of around 10 billion euros.
In the second quarter Saipem fell to a net loss of 157 million euros on asset writedowns, missing a Thomson Reuters consensus forecast for a 51 million euro profit.
Saipem said the market outlook remained challenging, especially in the offshore sector, but added its pipeline of projects remained promising.
“Despite the ongoing difficult market context we have good visibility on upcoming significant order acquisitions,” CEO Stefano Cao said.
He said the company was counting on securing orders worth $4 billion in the near future.
Russia’s Novatek is expected to select Saipem to build offshore platforms for a liquefied natural gas facility in the Arctic, one of Novatek’s partners said.
Oil service companies have been struggling to fill order books as oil majors defer projects and cut billions of dollars in costs to offset low crude prices.
Saipem, which employs around 35,000 people worldwide, is a market leader in subsea engineering and construction work including the world’s most expensive oil field, Kazakhstan’s Kashagan.
$1 = 0.8582 euros Reporting by Stephen Jewkes; editing by Jason Neely