Subsea 7 has had another profitable quarter, but has warned that its full-year 2019 result will be impacted by slower-than-expected progress in certain projects.
Net profit was $42m for the third quarter 2019, which is a 45% reduction on the $76m seen in the same quarter last year for the subsea engineering, construction and services company, which owns a fleet of offshore construction vessels.
Revenue during the three-month period was healthy at $951m, but was down by 12% compared to the same point in 2018.
"Despite the environment of sustained lower energy prices and disciplined capital investment by our clients, our order intake has been strong in recent months, with $1.4bn of new awards and escalations in the third quarter," commented Jean Cahuzac, chief executive of the Oslo-listed company.
"Our investments through the cycle, in assets, technology and selective consolidation have kept us firmly in the top tier."
Cahuzac said the recent acquisition of 4Subsea continues Subsea 7's strategy "to lead the way in all our focus markets".
Cahuzac is due to retire at the end of this year and will be replaced by John Evans, who has been Subsea 7's chief operating officer since 2005.
Outlook for the year ahead
Subsea 7 has revised its guidance for its full-year result for 2019 and expects to record positive but "slightly" lower revenue and operating profit than in 2018.
This reduction, the company said, is "due to the timing of progress on certain projects".
"2019 is expected to represent the low point in the cycle for the group’s profitability," Subsea 7 said in its third-quarter report.
The firm expects better results in 2020, however, with higher levels of revenue and operating profit "driven by an increase in activity in our key markets".
"The percentage margin will take longer to recover as projects awarded with low pricing in prior year's progress to offshore execution," Subsea 7 said.
The firm said it expects demand for offshore wind farm construction services to increase in the future.
It also expects to see a gradual recovery in subsea umbilicals, risers and flowlines (SURF) activity as larger greenfield oil and gas projects are sanctioned.
