Subsea 7 S.A. announced results for the second quarter and first half 2012 which ended on 30 June 2012. Unless otherwise stated, the comparative period is the three and seven months ended 30 June 2011 for Subsea 7 S.A. and the results of Subsea 7 Inc. following the date of combination.
Jean Cahuzac, Chief Executive Officer, said:
“I am pleased with our results. We have delivered a good second quarter and expect full year Adjusted EBITDA to be in line with consensus expectations.
Our positive views on the market have not changed as we have not seen an impact from oil price volatility or macro-economic uncertainties on our clients‟ plans, albeit we remain vigilant. We still expect the present high level of bidding activity to translate into market awards later this year, in particular in the North Sea, Africa and Brazil.
We have completed the divestiture of NKT Flexibles in accordance with plan during the quarter. Since the quarter-end, in addition to completing the $200m share buyback and distributing a special dividend of $0.60 per share, we have also completed the spin-off of Veripos. We are on track with our fleet investment program and continue to strengthen our global engineering and project management capabilities to meet our clients‟ needs.”
Territory outlook:
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 the operations in Q2 have been somewhat impacted by weather, Subsea 7 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, the Company sees an increased number of prospects in the medium term as the clients‟ activity slowly picks up.
In Brazil, Subsea 7 expects Petrobras‟s 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 the Company is currently reviewing the options for their renewal. The 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, Subsea 7 expects 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.
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. Subsea 7 is today well positioned to manage these challenges. The engineering and project management capabilities, the size of the fleet and the financial strength position Subsea 7 well for long-term profitable growth.
[mappress] Press Release, August 09, 2012