A morning on the swing for Saipem, which went from a decline of up to 5% to an increase of up to 2% on the stock market. the incredible movement followed the first quarter data, announced yesterday evening, which are also positive results and in line with most expectations. But, according to analysts, what probably made investors suspicious was on the one hand the lack of mention yesterday of the 2024 guidance, and on the other, more simply, profit-taking after the rally of recent months.
In the first quarter profits of 57 million, adjusted ebitda +40%
The first quarter of the Eni group company, which provides services for the energy and infrastructure sector, led by the CEO Alessandro Clean, saw a profit of 57 million which compares with only the draw for the same period in 2023, a adjusted ebitda of 268 million (272 million the consensus estimate), in + 40% growth, and a cash generation of 68 million with a consequent reduction in net financial debt of 52 million to 209 million (post-Ifrs16; consensus estimate of 287 million). Revenues amounted to 3,047 billion (+18%) with an order book of 28,756 billion, -4% quarter on quarter compared to the record of 29,8 billion at the end of 2023.
Profit taking or no comment on guidance?
The results for the first quarter of this year are almost in line with expectations of analysts and also better in terms of order collection: 2,001 billion against 2,695 billion in the first quarter of 2023 and the 800 million expected. Overall the data continues to show the improvement in the company's operational and financial performance. But some analysts point out that no comment has been received on the guidance 2024 is was presented in February this year and this has made the market suspicious. Another reason could be linked, more simply, to benefited after the title in three months has gained +54,6%. Also in February the company promised to return to the distribution of a dividend from 2025.
Order portfolio already acquired at 29 billion
La cash generation of the quarter amounted to 68 million euros, with a consequent decrease in net financial debt, including leasing liabilities (52 million euros). Gross debt as of March 31, 2024 is 2,1 billion euros, while liquidity is close to 2,4 billion, with available cash of over one billion euros. The order book already acquired is equal to 29 billion euros, with a contribution of 2 billion euros in the first quarter. Approximately 75% of the acquisitions were made in the Offshore E&C (Engineering & Construction) business. “The level of the order book already acquired and the robust commercial pipeline confirm the excellent visibility on the activity foreseen over the strategic plan”, comment from Saipem. As for the net financial position, is negative by 209 million euros but an improvement compared to -261 million euros at the end of 2023.
Bond issue program of up to 3 billion
Il board of directors also resolved, for the subsidiary Saipem Finance International BV, a new Euro Medium Term Note bond programme of annual duration, up to 3 billion euros. “It will allow the Group to benefit from the typical flexibility of this instrument and quickly access the capital market in the event of new issues of non-convertible bonds” explained by Saipem.
Analysts' opinion on the first quarter
According to analysts of Banca Akros the company's results showed a strong improvement in revenues and ebitda, "although lower than expected, mainly due to the lower than expected level of margins in the Energy Vectors division". Equity, for its part, underlines how "the results are consistent with the 2024 outlook", specifying that "the first quarter is seasonally weaker and the result cannot be annualized"; Despite this, the growth of the indicators "is consistent with the guidance. We therefore expect the results to have no implications for our estimates." In the end Jefferies, which confirms the buy on the stock, believes that "the level of the order book, equal to 29 billion euros, and the robust commercial pipeline confirm the visibility on the activity foreseen during the Strategic Plan".
