Subsea 7 booms on higher sales

Strong profit: Subsea 7 CEO Jean Cahuzac

Subsea 7 posted a strong net profit in the second quarter as revenues soared and costs were kept in check.

The contractor has kept its full-year guidance intact but said "continued uncertainty" in the market means it is unwise to look at propsects beyond this year.

Net profit for the three months to the end of June was $264.6 million as compared with a loss of $13.4 million a year earlier.

Revenues shot from $1.68 billion to $1.91 billion, while operating expenses were down from $1.64 billion to $1.52 billion.

"Significant escalations on existing contracts mitigated the impact of clients delaying award dates for some of their new projects," the company said.

There was also a positive swing of about $30 million in financial items that helped bolster the bottom line.

Subsea 7's order backlog at the end of the quarter was also a healthy $11.2 billion.

The company has maintained its previous full-year guidance, with revenues expected to increase and adjusted earnings before interest, tax, depreciation and amortisation to "increase moderately".

Tendering activity remains highs, which bodes well for the medium-to-long-term outlook.

Subsea 7 warned, however: "Given the continuing uncertainty over the timing of market awards for a large number of Surf (subsea umbilicals, risers and flowlines) projects, as well as for our conventional business, it is premature to offer guidance beyond the current year."

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