Saipem Sees Profits Dip, Future Wobbly

Italian engineering firm Saipem reported April 23 a year-on-year Q1 net loss of €269mn, compared with a profit of €21mn in the same period of last year. It said the loss was "impacted by write-downs of tangible assets in the offshore drilling division of €260mn," related to impairments. Following the "unexpected deterioration of the market and the future investment plans revised by some of our clients," the company has taken a critical view of its assets' likely cashflow. New contract awards were down sharply, at €917mn, down from 2.517bn in Q1 2019.

It also reported a 10% dip in its Q1 2020 pre-tax earnings (Ebitda) to €240 ($255)mn. Last year's operating profit of €118mn became a loss of €177mn. Revenues of €2.172bn were up 0.7%.

CEO Stefano Cao said the company's "transformational strategy over the last few years has allowed Saipem to reach a strong economic and financial configuration with solid assets and no significant short-term debt maturing."

He said that the company's decision to support the energy transition was paying off. "The resilience, the flexibility and the adaptability proven over many years allow our construction sites and vessels to remain operative, while fully protecting the health and safety of our people, and enable us to firmly navigate the general economically weaker environment, which has justified 2020 guidance withdrawal,” he said.