Saipem sinks on the stock market after the presentation of the nine-month accounts and the new plan to 2025. One hour after the opening of the markets, the share drops 8% to 2,006 euros.
THE ACCOUNTS OF THE 9 MONTHS
Sales were mainly triggered by the results for the period ended 30 September, closed with revenues down by 6% to 5,06 billion euros, a negative EBITDA of 455 million (it was positive for 353 million in the same period of 2020) and a net loss of 1,12 billion (from 1,01 billion). The adjusted net result was in the red by 862 million (from 210 million) while the net financial debt rose from 1,4 billion a year ago to 1,67 billion as at 30 September. Technical investments recorded a drop of 19% to 195 million, while orders acquired amounted to 4,86 billion (-8,8%).
These numbers, underlines the company, discount "a slowdown compared to 2020 in engineering and construction activities mainly due to the continuation of the health emergency, the suspension of activities in Mozambique and problems in offshore wind power". Saipem also highlights that the third quarter already shows signs of improvement, with revenues at 1,86 billion (+9,3% on the previous year, +18% on the second quarter), ebitda at -66 million (from -462 million in the second quarter and +82 million in 2020) and a net loss of 342 million (from -659 million in the second quarter). The Group also recorded new contracts for €4,9 billion, with available liquidity of €2 billion and an unused revolving line of €1 billion. For the second half of 2021, Saipem expects revenues of around €4,5 billion, a positive adjusted EBITDA, technical investments of around €250 million and net financial debt of around €1,7 billion.
THE NEW FLOOR
The oil company's board of directors has given the green light to the new 2022-2025 strategic plan which "aims to build a company that grows, generates profits and cash flow with precise development objectives in the traditional energy sector, energy transition and sustainable infrastructures, operating as a technological enabler of low carbon strategies”, underlined the CEO Francesco Caio.
Going into detail, the new plan provides for a cost cut with an intermediate target of 100 million by 2022 and a final target of 300 million by 2025. Revenues should instead grow at an average annual rate of 15% until 2025" thanks to the contribution of the backlog at 30 September 2021 of approximately 24,5 billion euros, new commercial opportunities and the favorable growth prospects expected in drilling".
The coming year will be crucial for Saipem which expects revenues and margins to grow, driven by offshore activities and drilling. In 2023, on the other hand, adjusted EBITDA should return to pre-Covid-19 levels to reach double-digit margins in the second part of the plan.
The new plan allocates 1,5 billion for investments by 2025 and estimates a decrease in net financial debt to 2,2 billion in 2022 "to then benefit from the important cash generation expected of over 800 million euros over the four-year plan" to land below 1 billion in 2025.
“The energy transition is not a simple shift towards low carbon sources, but a radical transformation of an entire ecosystem. From a highly centralized sector, characterized by large plants and little digitized to a distributed, highly interconnected one, with a growing centrality of innovative services and new operators different from the traditional ones on both the demand and supply side. It is a profound change that requires innovative and flexible operating models to compete and grow profitably”. underlines the managing director, Francesco Caio, explaining the extent of the new challenges posed by the energy transition.
