Red Ink for Subsea 7

Oslo-listed Subsea 7 has booked loss in the quarter ended March 31, 2018 on revenue drop of 10% due to lower activity levels in all business units and forex losses.

The subsea engineering and construction specialist posted quarterly loss of $18 million, or $3 cents per diluted share, on revenue of $809 million, versus profit of $146 million, or $41 cent per diluted share on revenue of $897 million in the comparable period in 2017.

Net loss included net foreign currency losses of $22 million, and a tax credit of $12 million.

The company reported adjusted EBITDA and adjusted EBITDA margin for the quarter of $103 million and 13% respectively, against $268 million and 30% in Q1 2017.

As mentioned above, weaker result in Q1 2018 reflected fewer projects in the final stages of completion, reduced offshore activity levels and vessel utilisation due to seasonality, and lower pricing on projects awarded during the downturn within the SURF and conventional business unit.

SURF and Conventional revenue for the quarter was $584 million, down $18 million compared to Q1 2017.

i-Tech Services revenue for Q1 2018 was $54 million, a decrease of $24 million or 32 per cent in the corresponding period in 2017.

Revenue for the Renewables and Heavy Lifting division was $173 million in Q1 2018, versus $220 million same time last year.

The Fleet

Active vessel utilisation was 58% in the first quarter and total vessel utilisation was 52%. Four vessels have left the fleet in the quarter, with the chartered vessel Lewek Constellation returned to its owner at the end of its operations on the TVEX and OCTP projects, and three older owned vessels, Seven Condor, Rockwater 1 and Seven Osprey were released for recycling. One chartered Life of Field vessel was added to the fleet for IRM activity, offshore Azerbaijan.

Revenue for 2018 is still expected to be in line with 2017 and adjusted EBITDA percentage margin is still expected to be significantly lower, the company said in its earnings report.

Order backlog was $5.3 billion, including new awards and escalations totaling $829 million.

Subsea 7 reported cash and cash equivalents of $1 billion at 31 March 2018, down $102 million in the quarter.

The special dividend of NOK 5 per share was approved at the AGM in April and will be paid in May.

Subsea World News Staff

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