Subsea 7 S.A. (Oslo Børs: SUBC, ADR: SUBCY, ISIN: LU0075646355) has unveiled its third-quarter 2023 results, showcasing a resilient performance in a challenging market. The Company reported a third-quarter Adjusted EBITDA of $201 million, with a margin of 13%, reflecting sound financial health and strategic execution.
Strong Financial Metrics
The third quarter brought positive financial outcomes for Subsea 7, with a notable free cash flow of $223 million. This surge contributed to a substantial increase in cash and cash equivalents, reaching $530 million. Impressively, the net debt, including lease liabilities, decreased to $606 million, down from $805 million in the second quarter. Order intake stood at $2.1 billion, resulting in a book-to-bill ratio of 1.3 times and a continued backlog growth to $10.8 billion.
Bullish Outlook and Guidance
John Evans, Chief Executive Officer of Subsea7, expressed confidence in the company’s trajectory, stating, “Subsea7 reported solid third quarter results in line with management’s expectations and the Group is on-track to meet guidance for the full year 2023.” Evans highlighted the positive momentum in operational progress, particularly in key projects within Subsea, Conventional, and Renewables.
The company anticipates a return of Adjusted EBITDA margins to a range of 15-20%, with projections reaching towards the upper end of the range by the full year 2025. Evans emphasized that recent awards and robust tendering activity support this optimistic outlook, providing visibility beyond 2025.
Renewables Unit Shines
The Renewables business unit demonstrated impressive performance, achieving a double-digit Adjusted EBITDA margin for the second consecutive quarter. Evans noted the unit’s success in stabilizing execution and high-grading new orders to rebalance risk and return. The completion of the OneSubsea joint venture and the extension of the Subsea Integration Alliance further solidify Subsea 7’s position in the market.
Operational Highlights
During Q3, Subsea 7 made significant strides in major Subsea and Conventional projects across the globe. From Norway to Brazil, Senegal to Saudi Arabia, operational activities showcased the company’s commitment to delivering excellence in the oil and gas industry. Noteworthy projects include Yggdrasil in Norway, Bacalhau in Brazil, and Sangomar in Senegal.
Financial Review and Future Prospects
Subsea 7 reported a 12% increase in revenue, reaching $1.6 billion, and an Adjusted EBITDA margin of 13%, slightly exceeding the prior year period. The financial review indicated improved profitability in Renewables and solid performance in Subsea and Conventional. The company looks forward to sustained capital expenditure in the subsea market and strong demand in offshore wind, positioning itself as a key player in the global energy landscape.
The full report can be found here
Source: Subsea 7
