- Revenue: EUR3.4 billion, up 22% year on year and 11% quarter on quarter.
- EBITDA: EUR297 million, up 36% year on year and 11% quarter on quarter.
- EBITDA Margin: 8.8%, consistent with the first quarter of the year.
- Net Cash Flow: EUR110 million in Q2, up from EUR68 million in Q1.
- Net Debt: Decreased, with a net cash position pre-IFRS of EUR394 million and EUR1.3 billion of available cash.
- Order Intake: EUR5.1 billion in Q2, with a book-to-bill ratio of 1.5 times.
- Backlog: Over EUR30 billion, at record levels.
- New Awards: Over EUR7 billion since the beginning of the year.
- Group Revenues (H1 2024): Increased by 20% year on year.
- Group EBITDA (H1 2024): Increased by 38% year on year.
- Net Result (H1 2024): EUR118 million, up from EUR40 million in H1 2023.
- Operating Cash Flow (H1 2024): EUR455 million, more than 3 times the level of H1 2023.
- Asset-Based Services Revenue (H1 2024): EUR3.4 billion, up 32% year on year.
- Asset-Based Services EBITDA (H1 2024): EUR391 million, up 50% year on year.
- Drilling Offshore Revenue (H1 2024): EUR446 million, up 24% year on year.
- Drilling Offshore EBITDA (H1 2024): EUR166 million, up 18% year on year.
- Energy Carriers Revenue (H1 2024): EUR2.5 billion, up 7% year on year.
- Liquidity: EUR3.1 billion at the end of June, including EUR470 million of unused RCF and almost EUR1.3 billion of available cash.
- Bond Issuance: EUR500 million six-year bond issued in May.
Release Date: July 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Saipem SpA (SAPMF, Financial) recorded an acceleration in both order intake and cash flow generation in Q2 2024.
- Revenue grew by 22% year on year and 11% quarter on quarter, driven by offshore activities.
- EBITDA increased by 36% year on year and 11% quarter on quarter, with an EBITDA margin of 8.8%.
- Net debt decreased despite an increase in lease liabilities, indicating effective deleveraging.
- The order intake was strong at EUR5.1 billion, with a backlog exceeding EUR30 billion, providing good visibility on future performance.
Negative Points
- The Thai oil project incurred additional provisions, impacting the overall financial performance.
- Temporary suspensions from Saudi Aramco affected three jack-ups, impacting the drilling offshore segment.
- The energy carriers division reported a 0% EBITDA in Q2 2024, highlighting ongoing challenges.
- The company faces tightness in the availability of blue-collar workers in certain geographies, particularly the Middle East.
- There is uncertainty regarding the restart of the Mozambique LNG project, which could impact future revenue.
Q & A Highlights
Q: The order intake was very strong in the first half of the year. Can we expect the same for the full year, and what opportunities are there in the Middle East?
A: The market is strong, but it's prudent to remain conservative. Opportunities are present, especially in the Middle East, but winning tenders depends on competition.
Q: What is the expected fleet utilization rate for 2026, and what profitability do you aim for with new acquisitions?
A: The target is 70%-75% utilization, which is considered optimal. For profitability, high double-digit margins for surf activities and mid-double-digit for conventional activities are targeted.
Q: Can you provide an update on the clean fuel project in Thailand and its profitability?
A: We have taken further provisions for expected extra costs and are in discussions with the client for relief. The project is progressing with these considerations in mind.
Q: With Mozambique LNG not restarting yet, how does this affect your revenue guidance?
A: The impact is non-material as most of the expected revenue was from the suspension contract. The guidance remains unchanged.
Q: What is the ideal duration for leasing new vessels, and are you considering purchasing vessels?
A: The ideal duration varies; for example, the JSD6000 is leased for five years with options. We prefer an asset-light strategy, focusing on leasing to match market peaks.
Q: What is the expected margin improvement in the second half, and which divisions will contribute?
A: Margin improvement is expected mainly from the offshore division due to better fleet utilization and fewer provisions. Onshore will also contribute as legacy projects are completed.
Q: How does the derisking of EPC contracts affect margins?
A: There is no margin sacrifice. Controlling risk ensures margins are maintained, as opposed to the past where uncontrolled risks eroded margins.
Q: What is the current status of the legacy backlog, and how does the new derisk model compare to the traditional lump sum model?
A: The legacy backlog is down to EUR950 million. The new derisk model does not sacrifice margins but ensures better risk control compared to the traditional lump sum model.
Q: What are your expectations for the energy carriers division in the second half?
A: We expect a positive margin for the energy carriers division, moving towards a mid-single digit margin over the next few years.
Q: Are you considering new offshore wind projects, and what is the timeline?
A: We are looking at the market, but currently, there are few tenders. We expect more opportunities starting from 2025 and are preparing for floating offshore wind projects.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
