Subsea 7 S.A. (Oslo Børs: SUBC, ADR: SUBCY, ISIN: LU0075646355) has released its financial results for the fourth quarter and full year ending December 31, 2023, showcasing significant growth and strategic developments.
Fourth Quarter and Full Year Highlights:
- Shareholder Returns: The company aims for at least $1 billion in shareholder returns over four years through dividends and share repurchases.
- Financial Performance: Achieved a full-year Adjusted EBITDA of $714 million, marking a notable 28% increase year-on-year, with a margin of 12%. Fourth-quarter Adjusted EBITDA stood at $245 million, showing a robust 45% increase compared to the prior year.
- Order Intake and Backlog: Recorded a full-year order intake of $7.4 billion, resulting in a book-to-bill ratio of 1.2 times and a continued growth in backlog to $10.6 billion.
- 2024 Guidance: Reconfirmed guidance for 2024 with an expected Adjusted EBITDA within the range of $950 million to $1.0 billion.
According to John Evans, Chief Executive Officer of Subsea 7, the company closed 2023 with strong operational performance, reflected in the increased Adjusted EBITDA. Evans emphasized the significant backlog secured by the Group, providing excellent visibility for 2024’s operations. He expressed confidence in achieving at least 33% Adjusted EBITDA growth in 2024 and highlighted the commitment to shareholder returns, amounting to at least $1 billion over the next four years.
Fourth Quarter Operational Highlights: During the fourth quarter, Subsea 7 made significant progress across its portfolio of Subsea and Conventional projects worldwide. Operations included pipeline fabrication in Australia, procurement commencement in Türkiye, and engineering progress in Brazil. Notable activities also occurred in the North Sea, Angola, and Taiwan, reflecting the company’s diversified operational footprint.
Fourth Quarter Financial Review: Revenue for the quarter reached $1.6 billion, marking a 26% increase compared to the previous year, with an Adjusted EBITDA margin of 15%. Despite depreciation, amortization charges, and impairment costs, the company maintained a strong financial position with net cash generated from operating activities amounting to $529 million.
Commitment to Shareholder Returns: The Board of Directors proposes returning at least $1 billion to shareholders from 2024 to 2027. This commitment includes a proposed cash dividend of NOK 6.00 per share, payable in two equal installments in May and November 2024. Additionally, the company plans share repurchases totaling approximately $80 million in 2024, reflecting its confidence in future performance.
Outlook: Subsea 7 anticipates revenue between $6.0 billion and $6.5 billion in 2024, with Adjusted EBITDA expected within a range from $950 million to $1.0 billion. The company foresees a positive outlook for its Subsea and Conventional business, supported by a tender pipeline of $21 billion. In Renewables, despite project delays, the company remains optimistic about long-term demand in the offshore wind market.
With a strong focus on maximizing returns and sustainable value creation, Subsea 7 S.A. is poised for continued growth and strategic advancement in the maritime and project freight sectors.
Source: subsea7
