Subsea 7 Profits Dip in Q1
Subsea 7 S.A. announced its financial results for the first quarter ending March 31, 2016, reporting revenues of $746 million, down 37 percent from the prior year period. Adjusted EBITDA meanwhile was $284 million with an Adjusted EBITDA margin of 38 percent, higher than 2015 despite the lower revenues.
Subsea 7’s Chief Executive Officer, Jean Cahuzac, said, “This performance benefitted from good project execution overall and successful risk mitigation measures on projects which were nearing completion. It also reflected the impact of the group’s cost reduction and resizing plan that was implemented in 2015.”
“Active vessel utilization was 71 percent with one chartered vessel released in the quarter and seven owned vessels stacked at quarter end. Total vessel utilization in the first quarter was 55 percent due to low levels of activity,” Cahuzac said.
A Q1 order intake of $1.1 billion increased the group’s backlog to $6.5 billion of March 31.
“The outlook remains challenging and the timing of new contract awards is still uncertain as clients continue to postpone capital investment decisions in the current market environment,” Cahuzac said, adding that the group is working with clients and partners to drive down the costs.
“Full year 2016 revenue is expected to be significantly lower than in 2015,” Cahuzac said, “and Adjusted EBITDA percentage margin is expected to be lower compared to 2015. In this context, additional cost reduction measures will be implemented during the year.”
