Saipem Net Profit Drops 60% as it Trims 2013 Revenue Target

By Liam Moloney

Saipem SpA (SPM.MI) Monday trimmed its 2013 revenue forecasts after it reported a 60% fall in net profit in the third quarter, adding to the sense of pessimism that has seen it shed almost half its value and issue two profit warnings this year.

The Italian oil services company said new orders in the third-quarter tumbled 67% from the end of June, indicating that reputational issue could be denting its success in qualifying and winning contracts.

Saipem confirmed that it will post a net loss of between 300 million euros and 350 million euros ($414 million to $483 million) and a flat operating profit for the year. It lowered the revenue forecast to about EUR12.5 billion from an earlier estimate of around EUR13 billion as a result of delays in new contracts.

"We continue to see opportunities in the market, although the timing of some contract awards remains uncertain," Chief Executive Umberto Vergine said in a statement.

Third-quarter net profit slipped to EUR101 million on the year, while operating profit was down 48% and revenue fell 0.8% to EUR3.52 billion over the same period.

Saipem added that it received orders worth EUR1.2 billion in October, including preparatory work relating to the South Stream Offshore Pipeline.

Write to Liam Moloney at [e-mail]

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