Saipem Sees 2014 Net Profit after Loss as Targets Higher Margins

By Liam Moloney

ROME--Saipem SpA (SPM.MI), the Italian oil services company that has been hit by a string of profit warnings, Tuesday said it swung to a net loss in 2013, but predicted that it will be able to return to a profit this year.

The Milan-based company said in a statement that the net loss for 2013 was 159 million euros ($216.2 million), while operating profit was EUR147 million on revenue of EUR12.3 billion.

These figures take into account the restatement of 2013 figures, which was required by securities regulator Consob. In 2012, the company made a net profit of EUR659 million, operating profit of EUR1.25 billion and revenue of EUR13.1 billion. The figures for 2012 were also restated.

"2013 has been a difficult year for Saipem," said Chief Executive Umberto Vergine. "We shall continue to focus on improving our operational performance and increasing our order backlog with higher-margin contracts."

The Milan-based company, in which Eni SpA (E) has a 43% stake, forecasts a net profit of between EUR280 million and EUR380 million in 2014 and an operating profit of between EUR600 million and EUR750 million on revenue of between EUR12.5 billion and EUR13.6 billion.

New orders in 2013 tumbled to EUR10.7 billion from EUR13.4 billion the year before. Total order backlog was EUR176.5 billion at the end of December.

At 1513 GMT, shares fell 1.8% at EUR16.25, giving Saipem a market capitalization of EUR7.3 billion. The shares are underperforming the Italian benchmark FTSE Mib index.

Write to Liam Moloney at [e-mail]

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