Subsea 7: No Impact From Econ Uncertainties, Expects Contract Wins

   By Dominic Chopping 
 

Norwegian seabed-to-surface engineering contractor Subsea 7 S.A. (SUBC.OS) said Thursday it still has a positive view on the market as it hasn't seen any impact from oil price volatility or macro-economic uncertainties and it expects the present high level of bidding activity to translate into market awards later this year.

 
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-CEO Jean Cahuzac says: "In this growing worldwide market, the key challenges for the industry continue to be the availability of qualified and experienced personnel, and the need to manage an increasingly tight supply chain and assure reliability in complex project delivery."

-"In West Africa, market award of some large SURF contracts has been delayed by a few months. As a consequence, the offshore execution of the majority of these new projects is now expected to start in 2014."

-"In the North and Norwegian Seas, levels of tendering remain strong with improved pricing. While our operations in 2Q have been somewhat impacted by weather, we expect results to continue to improve year-on-year as low margin contracts awarded in prior years are phased out."

-"In the Gulf of Mexico, we see an increased number of prospects in the medium term as our clients‟ activity slowly picks up."

-"In Brazil, we expect Petrobras' (PBR) demand for PLSV vessels to remain strong in the years to come. Four Subsea 7 vessel contracts are due to complete in the second half of 2013, and we are currently reviewing our options for their renewal. Our Guara Lula project execution remains on track to achieve its revised targets as previously announced."

-"In Asia Pacific, pricing conditions remain more challenging than in other parts of the world. However, we expect projects to come to market award later this year, with associated offshore activity in late 2013 and beyond."

-"As previously announced, the contribution of the SapuraAcergy joint venture will be affected by the revised schedule of the offshore operations of the Gumusut project which are now planned for 2013."

-Backlog $8.29 billion, from $7.88 billion.

-Revenue $1.48 billion, from $1.34 billion.

-Operating profit $246.4 million, from $209.9 million.

-Gain from sale of interest in NKT Felxibles $220 million.

-Net profit $413.3 million, from $118.3 million.

-Shares closed Wednesday at NOK128.50, valuing the company at NOK45.21 billion.

-Write to Dominic Chopping at [e-mail]

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