Subsea 7 Reports 'Satisfactory' Q2 Results with Focus on Renewables
Posted 26/07/2023 13:27
Subsea 7, an engineering, construction, and services group, released its second-quarter financial results, which CEO John Evans described as "satisfactory," with particular emphasis on the strong performance in renewables. While the company's pre-tax profits for the first six months of the year were £19.5 million, a decrease compared to £23.7 million reported in H1 2022, revenue for the same period increased year-on-year from £1.8 billion to £2.1 billion. Subsea 7 expects this upward trend to continue in the second half of 2023.
The company's preferred financial metric, adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) for Q2, was $162 million, an 11% increase from Q1. The renewables business unit also showed positive signs, with an adjusted EBITDA margin of 11%, indicating progress in that segment.
Subsea 7 reported a robust order intake of £1.7 billion, and its backlog stands at over £7.7 billion, with £2.3 billion expected to be executed in 2023 and £3.3 billion in 2024. Notable operational highlights include the completion of cable laying activities at Seagreen, Scotland's largest offshore wind farm, and significant progress at the Dogger Bank development.
However, the report did not mention Subsea 7's unsuccessful attempt to acquire DOF Group, a Norwegian subsea services firm. In June, the company temporarily paused its pursuit of DOF after failing to engage in "constructive dialogue" with the latter's board.
Looking ahead, Mr. Evans expressed confidence in Subsea 7's prospects, stating that the company is on track to meet its Adjusted EBITDA expectations for the full year 2023. The strong backlog, combined with positive dynamics in project tendering, has led to expectations that the Group Adjusted EBITDA margin will return to a range of 15-20% over the next four years. The company received notable awards, including the Sakarya Phase 2A integrated subsea development contract in Turkey and an integrated monopile and cable installation contract for the East Anglia THREE wind development in the UK, contributing to its positive momentum.