How much will Saipem lose
Saipem's board of directors completed the review of the projects started in January. Here are the details on the 2021 accounts and the guidelines of the new strategic plan
Today the stock of Saipem – the engineering company for the energy sector in serious financial difficulties – grew by 1.2 percent (1.02 euros) on the Milan stock exchange, after a sharp decline in start-up. The growth is due to analysts' forecasts, who reported the margins for improvement in terms of the company's orders and deep-water drilling activities, which returned to profits of 47 million euros.
PROJECT REVIEW COMPLETED
Today Saipem's board of directors completed the review of the projects in progress launched last month, specifying that it had not highlighted any further impacts than those communicated on January 31st.
On that date, Saipem made it known that its statutory financial statements for 2021 are expected to close with losses of more than one third of the share capital, with revenues and EBITDA less than 1 billion euros compared to the forecasts released earlier, on 28 October.
REVENUES AND EBITDA
"The preliminary results for 2021", Saipem says in a note , "closed with adjusted consolidated operating revenues of € 6,875 million, down 6.4% compared to 2020. The adjusted consolidated operating EBITDA of 2021 was negative for 1,192 million euros ".
THE MOST CRITICAL PROJECTS
The company explains how the fourth quarter of the year weighed "significantly" on the 2021 preliminary results, "which reported a negative consolidated operating EBITDA of 901 million euros, discounting the negative impact of 1,020 million euros" . The declared cause is the difficulties encountered by Saipem in some offshore wind and plant projects: two of the most critical were Neart na Gaoithe in Scotland (offshore wind) and LNG Mozambique in Mozambique (liquefied natural gas) .
“Without the impact described”, says Saipem, “the fourth quarter adjusted consolidated operating EBITDA would have been positive for around 120 million euros, confirming the overall solidity of the portfolio of operated activities”.
THE NEW ACQUISITIONS
New contract acquisitions in 2021 amounted to € 7.2 billion. In the fourth quarter, in particular, there was a strong acceleration compared to the previous one: 2.3 billion, over five times as much.
THE NEW STRATEGIC PLAN
The board of directors also approved the guidelines for the revision of the 2022-2025 Strategic Plan (released, the original one, on 28 October last). Which will first of all aim at a reduction in overhead costs, with an increase in the target for 2022 above € 150 million. And then a greater focus on offshore activities, both in drilling and engineering, and greater selectivity in onshore acquisitions, "favoring contracts with a higher technological content in the LNG and gas valorization segments".
The change in the direction of offshore wind, undertaken by Saipem to align itself with the ecological transition, appears to be downsized and directed towards “low-risk activities”; however, the focus on carbon capture and reuse, plastic recycling and submarine robotics technologies is reiterated.
DIALOGUE WITH ENI, CDP AND BANKS
"The revision of the 2022-25 Strategic Plan", declares the company, "lays the foundations for the maneuver to strengthen Saipem's financial and equity structure, for which the discussions with the shareholders who exercise joint control continue constructively – ENI SpA and CDP Industria SpA – and with the banks ".
Eni and CDP Industria, part of the Cassa Depositi e Prestiti group, own respectively 30.5 and 12.5 per cent of Saipem's shares. In recent weeks they have appointed two managers who will support the CEO Francesco Caio in this phase of rescue and reorganization of the company.
As explained by Startmag on the basis of the indiscretions revealed by Bloomberg , Saipem is planning a capital increase of approximately € 2 billion, entrusted to Eni and Cassa Depositi e Prestiti. It is also negotiating with the banks (primarily Intesa Sanpaolo and UniCredit ) the extension of a 1 billion euro credit line. And finally, with his advisors, he is evaluating the potential sale of one of its divisions focused on drilling , aiming to raise 1 billion.
THE APPOINTMENT OF MARCH 15
On March 15, the board of directors will have to approve the updated 2022-2025 plan and the financial maneuver: on this date, moreover, the consolidated financial statements and the draft statutory financial statements 2021 will also be examined for approval (which, as mentioned, it is expected to close with a loss of more than one third of the share capital).
THE 500 MILLION BOND
A 500 million euro bond is due to expire on 5 April for Saipem.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/saipem-revisione-progetti-nuovo-piano-strategico/ on Thu, 24 Feb 2022 15:05:06 +0000.