Sutton, UK-based Subsea 7 reported an active vessel utilisation rate of 89% in its Q3 results presentation on 8 November, up 11% from Q3 2017 and the highest level since 2014.
The high utilisation reflected strong activity in the West Nile Delta Phase Two project offshore Egypt, the Hasbah project offshore Saudi Arabia and the Borkum II project offshore Germany as well as increased inspection, repair and maintenance (IRM) activity.
While there were higher levels of activity in subsea umbilicals, risers and flowlines, conventional and IRM, activity levels in the renewables and heavy-lifting arm of the business decreased.
On the financial side, Q3 revenue was US$1.1Bn and adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was US$217M. The EBITDA margin of 20% was 5% lower than Q3 2017, which the company attributed to lower-priced projects taken on during the downturn and a reduced contribution from the company’s renewables and heavy-lifting business unit.
Looking ahead, the company anticipates several large greenfield project awards in 2019, which it believes will boost utilisation of vessels and also improve margins. Nonetheless, it expects 2019 to be a cyclical profitability low point, with 2020 expected to show recovery in utilisation and financial performance.
Subsea 7 chief executive officer Jean Cahuzac said “Our total vessel utilisation was the highest it has been since 2014 with several large projects executing offshore installation campaigns using our key enabling vessels supplemented by vessels from the wider fleet.
“Subsea 7 is well positioned for the recovery with its differentiated capability, long-standing relationships and market-leading technology.
“We will continue to focus on cost discipline and efficiency while preparing for the future increase in activity related to the larger greenfield projects that are now being tendered and awarded.”
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