Subsea 7 Keeps Profit in Line with Offshore Wind at Its Back

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Oslo-listed Subsea 7 has delivered another positive quarter backed by higher activity in renewables sector as it came almost flat with profit in the prior-year quarter.

The subsea engineering and construction specialist posted quarterly profit of $146.3 million, or $41 cents per share, on revenue of $897 million, versus profit of $146.5 million, or $42 cents per diluted share on revenue of $746 million same time last year.

Quarterly increase in revenue was boosted by the Beatrice wind farm installation project, while partially offset by lower activity levels within the SURF and Conventional and i-Tech Services Business Units.

Despite revenue rise, lower activity levels within the above mentioned divisions have resulted in a decrease of $25 million in net operating income compared with Q1 2016. In addition, the company recognised a net foreign currency loss of $7 million.

The company also reported adjusted EBITDA of $268 million, and margin of 30 percent compared to $284 million and 38 percent margin in Q1 2016.

Subsea 7’s order intake was $626 million for the quarter, which includes Mad Dog 2 project in the US Gulf of Mexico, and the Sole project, offshore Australia..

The company said its order backlog at the end of March 2017 was $5.7 billion, of which $2.7 billion is expected to be executed in 2017.

Subsea 7 still expects its revenue to in line with 2016, but estimates adjusted EBITDA percentage margin to be below 2016 levels.

“Assuming a sustained oil price improvement and that cost reductions identified by the industry are consistently achieved, there is still cause to believe that the number of SURF project awards to the market could increase within the next 12 months,” the company said in Q1 earnings report

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