Subsea 7 has recognised a major loss in 2020, mostly on impairment charges, but increased its backlog by 20 per cent and kept revenue down only five per cent compared to 2019.
The engineering and construction specialist recognised 2020 net loss of $1.1 billion, against loss of $82 million in 2019.
In the full year 2020, revenue was $3.5 billion, against $3.6 billion in 2019.
This reflected lower revenue in the SURF and Conventional business unit, with low activity levels in West Africa and the Middle East.
Subsea 7 booked restructuring charges of $86 million; Approximately $70 million of net costs relating to Covid-19.
The company also took goodwill impairment charges of $605 million; other asset impairment charges of $323 million and a tax charge of $33 million.
Major impairments were mostly recognised in the second quarter of 2020, when Subsea 7 posted loss of $922 million.
In the fourth quarter, Subsea 7 posted loss of $103 million, up form $129 million loss same time last year.
Fourth quarter revenue of $1 billion was up 14 per cent from the prior-year period, reflecting higher activity in Renewables and Heavy Lifting.
SURF and Conventional revenue for the fourth quarter was $715 million, a decrease of $45 million from Q4 2019.
Revenue in the Life of Field business unit was $66 million, a decrease of $4 million compared with Q4 2019.
However, revenue in the Renewables and Heavy Lifting business unit was $234 million, up $59 million from Q4 2019.
Utilisation of active fleet was 82 per cent in Q4, up from 71 per cent same time last year, driven by high utilisation of Life of Field vessels and the PLSVs in Brazil.
At 31 December 2020, the active fleet comprised 30 vessels.
Orders and Backlog
In the fourth quarter of 2020, Subsea 7 booked new orders totalling $0.2 billion.
Backlog at the end of December was $6.2 billion, of which $4 billion should be executed in 2021. The backlog for execution in 2022 is $1.6 billion.
$3.8 billion of the backlog at 30 December 2020 related to the SURF and Conventional business and $2 billion related to the Renewables and Heavy Lifting business unit.
Cash and cash equivalents
Over the course of the 2020, cash and cash equivalents increased by $114 million, resulting in a year end balance of $512 million and net cash of $49 million after including lease liabilities of $254 million.
The company’s liquidity remained strong with a revolving credit facility of $656 million and a Euro Commercial Paper programme equivalent to $800 million, both of which were unutilised at year end.
New loan facility and special dividend
On 24 February 2021, the Group entered into a $500 million five-year amortising loan facility backed by a $400 million guarantee from UK Export Finance.
Subsea 7 has also proposed a special dividend payment of NOK 2.00 per share, equivalent to approximately $70 million.
Subsea 7 expects costs associated with the Covid-19 pandemic to impact full year 2021 results. Revenue in 2021 should exceed the prior year level, predominantly driven by greater activity in Renewables.
Revenue in Subsea and Conventional should also increase due to the rephasing of some work from 2020 into 2021. Adjusted EBITDA is expected to improve year-on-year and net operating income is expected to be positive.