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Subsea 7 S.A. posted a robust financial and operational performance in the first quarter of 2025, achieving a 46% year-over-year increase in Adjusted EBITDA to $236 million, despite scheduled vessel maintenance activities.
Subsea 7 (Oslo Børs: SUBC) announced its Q1 2025 results on April 30, delivering a 10% increase in revenue to $1.53 billion and a solid Adjusted EBITDA margin of 15%, up from 12% in the same quarter of 2024. The group’s backlog remains high at $10.8 billion, providing more than 80% visibility for its full-year revenue guidance of $6.8 to $7.2 billion.
John Evans, CEO of Subsea 7, noted that strong execution on projects in both the Subsea and Renewables sectors offset seasonal downturns and maintenance downtime. “We’ve started the year with solid momentum,” he said, highlighting the importance of long-duration, deepwater developments and strategic energy projects, including work on the Sakarya gas field in Türkiye and emerging opportunities in Namibia.
Operational Highlights: Global Activity Despite Downtime
While vessel utilisation dipped slightly due to planned maintenance—particularly for assets like Seaway Strashnov and Seaway Alfa Lift—project activity remained high across key regions:
- In Africa, the Seven Arctic and Seven Borealis executed flexible and umbilical installations in Angola.
- In the Americas, Seven Oceans contributed to projects including Sunspear and Shenandoah in the US Gulf of Mexico, while Seven Vega continued rigid pipelay at Brazil’s Mero 3.
- In Asia-Pacific, operations advanced on Barossa and Scarborough in Australia, and work began at Sakarya Phase 2a in Türkiye.
- In the Renewables sector, activity increased with work resuming at Dogger Bank in the UK and the East Anglia THREE project involving the installation of 95 monopiles. Operations in Taiwan also remained strong with progress on the Hai Long project.
Renewables: Loss Narrows, Margins Improve
The Renewables segment showed a significant 37% revenue increase to $245 million and a reduced net operating loss of $5 million compared to $24 million in Q1 2024. The improvement was driven by higher activity levels and better project margins, particularly in Taiwan and the UK offshore wind markets.
The company remains optimistic about the UK’s Contracts for Difference (CFD) allocation round later this year, which is expected to nearly double the volume of sanctioned offshore wind projects. Subsea 7, with its strong client partnerships and proven track record, anticipates further growth in this segment.
Financial Review: Earnings and Margins Climb
- Net operating income reached $77 million, up from $20 million a year earlier.
- Diluted earnings per share were $0.06, down from $0.09, due primarily to foreign exchange losses of $28 million.
- Free cash flow for the quarter was negative $25 million, a marked improvement over the $96 million outflow in Q1 2024.
- Net debt, including lease liabilities, rose slightly to $632 million, equivalent to 0.5x Adjusted EBITDA from the past four quarters.
The book-to-bill ratio stood at 0.6x, with Q1 order intake of $0.9 billion, including $400 million in new awards and $500 million in escalations.
Outlook for 2025: Steady Guidance, High Visibility
Subsea 7 reaffirmed its 2025 guidance, projecting full-year Adjusted EBITDA margins between 18% and 20%, with the potential to exceed 20% by 2026. With $4.8 billion of its current backlog scheduled for execution in 2025, the company is confident in its financial trajectory, even as global economic uncertainty and commodity price volatility pose external challenges.
As the energy transition continues, Subsea 7’s dual exposure to conventional subsea oil and gas and emerging offshore renewables provides a balanced foundation for growth and resilience in a changing market landscape.
