Saipem drops to full-year loss

By Helen Wright12 February 2014

Oil and gas contractor Saipem has reported a net loss for 2013 of €404 million on a consistent basis.

Revenues fell from €13.4 billion in 2012 to €12 billion last year, while operating profit of €1.49 billion in 2012 plummeted to an operating loss of €98 million for 2013.

The company blamed the loss on weak order intake together with unexpected extra costs, and delays in awarding and executing new contracts.

Saipem and its majority owner Eni are currently the target of an investigation by prosecutors in Italy into corruption in Algeria concerning contracts awarded by Algerian state-owned energy company Sonatrach.

Saipem confirmed that the Milan Prosecutor’s investigation had been extended for six months, and was now expected to close in June 2014.

In addition, Saipem has been under investigation by Italian market securities regulator Consob, which uncovered irregularities in the contractor’s 2012 accounts. As a result, the company restated its 2012 accounts.

Admitting 2013 had been a difficult year for the company, Saipem CEO Umberto Vergine said, “2014 will be a transition year in which a significant proportion of engineering and construction activities will stem from low-margin legacy contracts.

“We shall continue to focus on improving our operational performance and increasing our order backlog with higher margin contracts delivering good returns for our shareholders,” he said.

The contractor 2014 forecast revenues of between €12.5 billion and €13.6 billion and net profit expected to bounce back to between €280 million and €380 million. The backlog at December 31, 2013, stood at €17.5 billion.

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