Saipem's performance in the first quarter of 2021 is still affected by the pandemic crisis and is influenced by a slowdown of activities and the rescheduling of project execution plans in some areas of the world.
Thanks to a good level of new contract acquisitions in the first quarter of 2021 for approximately EUR1.6 billion, and equal to the revenues for the period, the backlog remains at a record level of over EUR25 billion and is well diversified.
The financial structure is robust, with liquidity increasing to EUR2.5 billion as a result of the new bond successfully issued in March.
Recent events in Mozambique
On 26 April 2021, Total issued a press release declaring the force majeure on the Mozambique LNG project, considering the evolution of the security situation in the north of the province of Cabo Delgado in Mozambique.
Following the recent suspension of activities and the press release issued by Total, evaluations are underway in close cooperation with the client to preserve the value of the project.
While awaiting for further instructions and the outcome of the ongoing assessments between the parties, currently Saipem is not in a position to evaluate impacts on its financials for 2021 and therefore to confirm or update the business scenario provided to the market on 25 February 2021.
The market will be promptly updated when the situation becomes sufficiently clear and impacts can consequently be determined by the company.
As of 31 March 2021, the project is included in Saipem backlog for an amount of around EUR4 billion, of which approximately EUR1,4 billion euro related to activities from 1 April to year-end 2021.
Saipem, for which people's health remains the top priority, continues to monitor the persistent emergency situation and is promoting, on a voluntary basis, the vaccination process of its employees worldwide.
Specifically, in Italy the company has launched the anti-Covid-19 vaccination campaign for its employees, still on a voluntary basis, which will be carried out by healthcare professionals at expressly dedicated and equipped company facilities.
At present, out of a total of around 32,000 employees, the percentage of Saipem people who tested positive to Covid-19 has been around 11%, 7% of which are still infected and constantly monitored by the company.
Highlights of the first quarter
Good level of new contract awards of approximately EUR1.6 billion, in line with revenues for the period
Backlog still at a record level of over EUR25 billion1 (78% of the E&C portion non-oil-related), increased compared with the first quarter of 2020, ensuring solid support to the evolution in the medium to long term
Operating results of the first quarter, with revenues of approximately EUR1.6 billion and an adjusted EBITDA margin of 5.4%, reflect a slowdown and a rescheduling of project execution activities, in a context of a persistent health crisis and geopolitical tensions in Mozambique
Stefano Cao, Chief Executive Officer, commented: 'The results of the first quarter of 2021 are inevitably affected by the overall economic context, which is still heavily impacted by the pandemic crisis, by the slowdown of E&C activities in some projects and by the recent events in Mozambique. Over these years, Saipem has demonstrated resilience and adaptability in dealing with complexity in challenging scenarios. In a continuously evolving market, the company has solid fundamentals to face at best future challenges'.
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