A record quarter for Subsea7 has the company boosting its 2024 outlook.
After the Kristian Siem-backed owner inked a record $4bn in deals in the second quarter — boosting its contract backlog to an all-time high of $12.5bn — it raised its full-year revenue projection to between $6.5bn and $6.8bn.
The company was previously guiding to a $6bn to $6.5bn range.
“Subsea7 achieved several milestones in the second quarter of 2024 that support management’s confidence in the outlook for the group,” chief executive John Evans said in the company’s earnings release.
He pointed out that adjusted Ebitda jumped to $292m from $162m year over year while the margin improved to 17% from 11%, “driven by operational performance from both our project teams executing major contracts, and by our offshore crews delivering high utilisation and efficiency of our global enabler vessels”.
He added that both the growing backlog and its quality are expected to drive the company’s performance, with Ebitda margins anticipated to be between 18% and 20% in 2025, and above 20% in 2026.
For the quarter, Subsea7 posted a $63m profit, up from $14m in the second quarter of 2023 as revenue shot up to $1.7bn from $1.5bn.
Expense growth was muted, hitting $1.5bn from $1.4bn, and the company netted $8.1m from joint ventures.
The backlog
Of the $12.5bn backlog, $3.3bn is expected to hit the books this year, $4.9bn next year and $4.3bn in 2026 and later.
During the quarter, the company announced several contract awards in places like Poland and the Gulf of Mexico, deals it described as “sizeable” or between $50m and $150m in value.
But the quarter was marked by two so-called “super-major” contracts — or contracts valued over $1.25bn — inked in Brazil with the country’s state-linked oil major, Petrobras.
One was for the Buzios 9 field offshore Rio de Janeiro state and the other four long-term contracts for pipelaying support vessels.
Three of the pipelaying support vessel contracts will run for three years and a fourth for four. Subsea7 said those four contracts together were worth $1.25bn.
