Why is Saipem sinking on the stock market?
Saipem publishes data for the first nine months of 2021 and collapses on the stock market with the worst performance of the Ftse Mib. But he presented a new strategic plan, which includes investments and a different organization. All the details
Saipem, an energy company controlled by Eni and Cdp, today published data for the first nine months of 2021: revenues are down to 5.1 billion euros (compared to 5.4), net debt is 1, 7 billion and the gross operating margin was negative for 291 million. In particular, the costs for offshore or offshore wind power cost 170 million.
HOW THE THIRD QUARTER GOED
However, the data for the third quarter (July-September) indicate an improvement compared to the previous one: revenues grew by 18 percent, reaching 1.9 billion. On an annual basis, the increase is 9.3 percent.
The adjusted gross operating margin, on the other hand, was negative for € 25 million, compared to € 354 million in the second quarter of 2021. The net result was € -342 million: better than the -659 million in the second quarter, but worse if yes. considers the same period of 2020 (-131 million).
In the period July-September Saipem signed new contracts for 4.9 billion. Available liquidity amounts to 2 billion. However, on operating results (which in fact slow down compared to 2020), "the continuation of the effects of the Covid 19 health emergency on activities […], with delays in the execution of projects and the postponement of investment decisions in the sectors of interest ".
FORECASTS
Saipem expects to achieve revenues of 4.5 billion by the end of the year and to bring the gross operating margin to the positive.
HOW SAIPEM GOES ON THE STOCK EXCHANGE
Saipem today recorded the worst performance on the FTSE MIB index of the Italian Stock Exchange, with a decrease of 7.7 per cent to 2,013 euros and a minimum of 2,003. The stocks were stopped in the volatility auction when they reported a decline of 8 percent.
THE NEW STRATEGIC PLAN
Saipem has also approved the new four-year strategic plan, from 2022 to 2025, which – as explained by the CEO Francesco Caio – aims at "development in the traditional energy sector, in the energy transition and in sustainable infrastructures", with the aim of make the company a "technological enabler of low-carbon strategies", that is, low carbon emissions.
The name of the plan is Towards a new Saipem . In concrete terms, it envisages total investments of approximately 1.5 billion euros: of these, 200 million will go to enhance the company's technology portfolio. According to forecasts, the net financial debt will grow to 2.2 billion in 2022 and then fall below one billion by 2025.
Saipem intends to close fourteen of its overseas offices that are considered non-strategic. The plan envisages new orders for infrastructures worth around 3 billion euros in four years.
AND DIVIDENDS?
On the dividends to shareholders, however, Caio said that talking about it now “is a bit early. We have presented you with a story of growth that we hope will generate value over time ".
“When we are ready”, he continued, “we will discuss the dividend issue” with the board of directors. “To date we have no information to share with the market”.
NEW ORGANIZATION
The strategic plan is based on a new organizational structure made up of four different business areas. The first will focus on assets, such as drilling machinery and boats. The second on energy vectors, or on the design of plants and their conversion in a low-carbon sense.
The third area is dedicated to robotics, digital and industrial solutions (modular, easily repeatable and scalable systems, but also infrastructure monitoring services and digital technologies). The fourth and last, finally, is that on sustainable infrastructures, also with regard to mobility.
AGREEMENT WITH TECHNIPFMC
Saipem has announced a commercial collaboration agreement with TechnipFMC, a British company operating in the oil and gas engineering sector. Cooperation will focus on connecting infrastructures in deep waters.
WHAT THE ANALYSTS SAY
Banca Akros, which has a target price of € 2.20, expected revenues of € 2.11 billion, adjusted EBITDA of € 83 million and negative net profits of € 113 million. The dynamics of net debt (pre-ifrs16), which grew by as much as 300 million between the second and third quarters, are worrying – underlines Mf . Kepler Cheuvreux also focuses on this issue: "Liquidity remains solid, but Saipem will have to negotiate with the banks as the covenant (net debt / EBITDA at 3.5 times) will be broken", the investment bank said by the MF-DowJones agency, disappointed by the adjusted EBITDA “far below forecasts due to the substantial loss of 100 million euros in offshore wind E&C”.
Intesa Sanpaolo also expressed some doubts, remarks Mf : “The results are substantially in line with the expectations of the consensus. In addition to improving efficiency in traditional business, the new business plan also focuses on activities related to the energy transition and infrastructure. We consider this new plan challenging. We expect a substantial financial recovery to be visible no sooner than the next 12-18 months, ”the investment bank analysts said.
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-terzo-trimestre-nuovo-piano-strategico/ on Thu, 28 Oct 2021 11:50:45 +0000.