Subsea 7 has reported a revenue of $1.2 billion for the first quarter of 2023, a 4 per cent increase compared to the same period last year, stating it is on track to achieve a higher whole-year revenue than in 2022.
The revenue increase is said to reflect strong growth of 18 per cent in Subsea and Conventional, partially offset by a decline in Renewables as the Seagreen offshore wind project in the UK neared completion.
The adjusted EBITDA of $107 million equated to an adjusted EBITDA margin of 8.6 per cent, up from 7.2 per cent in Q1 2022. After depreciation and amortization charges of $122 million, net operating loss improved to $15 million from a loss of $31 million in the prior year period.
First quarter order intake was $1.9 billion comprising new awards of $1.2 billion and escalations of $0.7 billion, while the backlog at the end of March was $9.7 billion, of which $4 billion is expected to be executed in 2023 and $3.4 billion in 2024.
“The first quarter of 2023 unfolded as we expected and Subsea7 is on track to meet management’s guidance for the full year. Our backlog continued to grow during the quarter, with awards in both subsea and offshore wind, and bidding remains very active in both businesses,” said John Evans, Subsea 7 CEO.
“While this year marks a period of re-investment in both the subsea and renewables businesses, we are confident that our strategy positions the Group for strong cash generation, and the return of excess capital to shareholders, next year and beyond.”
According to Subsea 7, during Q1 the Subsea and Conventional business unit experienced normal seasonality due to winter conditions in most of the Northern Hemisphere.
Evans notes that most notably the company largely completed the installation of the $1.2 billion fast-track Sakarya project in Türkiye and the development achieved its first gas in April.
Seven Oceanic, Seven Pacific, Seven Sisters and Seven Vega were active on Sakarya, Bacalhau in Brazil and Sangomar in Senegal. Seven Oceans was active in the Gulf of Mexico before transiting to Norway where it prepared for work on the Northern Lights carbon capture project. In the UK, the company’s diving support vessel (DSV) fleet achieved reduced utilization due to the postponement of activities by clients.
In the Renewables business unit, Seaway Aimery and Seaway Moxie worked on the cable lay scope of Hollandse Kust Zuid in the Netherlands. Seaway Strashnov was in dry dock, as planned, for most of the quarter and resumed operations at Dogger Bank A&B at the end of March.\
In terms of the whole year of 2023, Subsea 7 said it continues to expect revenue and adjusted EBITDA to be higher than 2022, with a weighting towards the second half of the year.
“Overall, Subsea7 delivered a satisfactory financial performance in the first quarter and we are confident in the outlook for the remainder of the year and beyond,” Evans concluded.
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