How is Saipem doing?
After the publication of the 2023 economic results, which exceeded the objectives, Saipem grew by 7.7 percent on the stock market. Here are numbers, forecasts and analyst opinions
Saipem, an energy infrastructure company controlled by Eni and Cassa Depositi e Prestiti, gained 7.7 percent on the stock market today, to 1.59 euros per share, a day after the presentation of the 2023 economic results . The stock market performance was significantly better than the FTSE MIB index as a whole, which grew by 0.3 percent.
At the beginning of 2022, Saipem had launched an alarm on profits: in the closing of the statutory financial statements for the 2021 financial year, there was talk of losses exceeding a third of the share capital. Subsequently, the company was recapitalized and restructured both in management (CEO Francesco Caio was replaced by Alessandro Puliti) and in business .
SAIPEM RESULTS IN 2023
In 2023, Saipem achieved results exceeding the strategic plan objectives, growing in turnover and margins, strengthening its financial position and achieving positive cash generation. Net profit was 179 million euros, while new orders collected were worth 18 billion euros.
More specifically, the company reported revenues of 11,874 million euros, 19 percent more than in 2022, and an adjusted EBITDA of 926 million euros, 56 percent more. Over 70 percent of order acquisitions concerned the offshore sector, including engineering and drilling services. The restructuring plan after the 2022 profit warning envisaged a greater focus on the offshore segment (at sea).
As of 31 December 2023, Saipem's pre-IFRS 16 net financial position was positive by 216 million euros; a year earlier it was negative for 261 million.
FORECASTS FOR 2024
For 2024, Saipem expects revenues of between 12.7 and 13.3 billion euros, an operating cash flow of between 740 and 780 million and investments of approximately 440-480 million.
THE OBJECTIVES OF THE PLAN TO 2027
In the new 2024-2027 strategic plan, dedicated to "sustainability", Saipem aims to acquire new orders for approximately 50 billion euros; orders in the low-carbon and zero-carbon segments, i.e. those most aligned with the energy transition, will constitute approximately a third of the total. Investments, however, will amount to 1.4 billion.
The company has also promised dividends equal to 30-40 percent of free cash flow; in 2025 a dividend will be paid, based on the 2024 results. In 2027 the EBITDA margin will be around 12 percent.
WHAT THE ANALYSTS THINK
The investment bank Jefferies – which has a buy rating on the Saipem stock and a target price of 2.20 euros – judged the 2023 results positively: revenues and margins were higher than expected, while the debt was 25% lower percent. The company's forecasts for revenues in 2024 and growth levels in the strategic plan to 2027 are also above estimates.
Equita analysts have defined the framework for the new strategic plan as "very strong", underlining in particular the growth forecasts of the low/zero-carbon segments on the order book, which will represent a third of the total compared to 25 percent in the strategy previous. Looking to 2024, Equita expects a potential 20 percent increase in EBITDA estimates and 30 percent increase in free cash flow.
Saipem's results are also "very good", according to Intermonte, who also spoke of "very strong guidance ".
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/saipem-risultati-2023/ on Thu, 29 Feb 2024 15:12:22 +0000.