Saipem back in black in Q2

Italian oilfield services company Saipem benefited from earnings growth in its core offshore E&C and drilling segments in the first half of the financial year.

In a July 27 financial update that will give investors confidence in its $2.7bn turnaround strategy, Saipem said adjusted EBITDA had swung from a €266mn loss to €321mn yr/yr, thanks to revenues that came in 40% higher at €4.4bn. Offshore engineering and construction generated positive core earnings of €166mn from January to June, compared with a €271mn loss last year.

Saipem is doubling down on its core offshore engineering, construction and drilling contracts, having previously focused on offshore wind contracts in the EPC domain last year. Sluggish demand for its wind generation services led a disastrous annual loss of $2.7bn at Saipem in 2021, forcing a change in strategy and a $2.7bn cash call to its investors.

The six-month financials suggest Saipem is back on track. A strong order intake of €5.8bn that largely drew upon offshore E&C and drilling contracts expanded its backlog to €23bn, from €22.1bn in the first quarter. The drilling offshore segment produced €86mn in adjusted core earnings, marking an annual increase of almost two-fold.

It was mixed picture for Saipem's financial discipline, however. Capex spends declined 17% yr/yr to €112mn, including discontinued operations, but net debt inclusive of IFRS16 crept upwards to €1.7bn as of June 30, compared with €1.5bn at December-end.