Saipem Posts Record Quarter Net Loss

By Liam Moloney

Saipem SpA (SPM.MI), the Italian oil services company that has shed almost half its value since the start of the year, Tuesday recorded it worst quarterly net loss from provisions in Algeria, Mexico and Canada and lower margins in projects.

Saipem, in which Eni SpA (E) is the biggest shareholder with a 43% stake, confirmed 2013 guidance of a net loss of between 300 million euros ($399 million) and EUR350 million, a flat operating profit and revenue of about EUR13 billion.

It swung to a second-quarter net loss of EUR685 million and an operating loss of EUR670 million as revenue slipped 36% to EUR2.10 billion. That compares with a net profit of EUR243 million and an operating profit of EUR393 million in the same period last year.

The second-quarter results are worse than anticipated by six analysts polled by Dow Jones Newswires.

The Milan-based company disclosed late last year that it was under investigation in Italy on suspicions of corruption involving some of its Algerian contracts. The company denies any wrongdoing.

Saipem further shocked investors by issuing two profit warnings in the first half of the year.

On Tuesday, it appointed Piergaetano Marchetti, an expert in Italian corporate governance, as its new deputy chairman. He will provide oversight of the ongoing review of Saipem's governance and control system, it added.

At 1427 GMT, Saipem shares gained 7.2% at EUR16.47, giving it a market value of ERU6.79 billion, while Italy's benchmark FTSE Mib adds 1.3%.

Write to Liam Moloney at [e-mail]

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