Italian oil and gas contractor Saipem cites offshore wind in €1 billion profit warning

Oil and gas contractor Saipem has blamed difficulties in offshore wind projects for a €1 billion downgrade for its profits in the second half of 2021 

It cited delays in critical supplies and revised estimates of execution times and costs as partial explanations for lowering its forecast adjusted Ebitda from €4.5 billion to €3.5 billion for the last six months of the year.

The Italian engineering firm also blamed a hit from onshore oil and gas engineering and construction projects, for which the increase in costs and materials is only partially recoverable.

It is unclear how much of Saipem’s €1 billion downgrade is attributable to its offshore wind difficulties. Saipem declined to comment further, including what offshore wind projects it had been working on or how much of its total revenue it makes from offshore wind.

In its preliminary results, the company stated that there had been a “significant deterioration” in the full-life margins of some onshore oil and gas and offshore wind projects due to the coronavirus pandemic and current and prospective increases of the costs of raw materials and logistics.

Following today’s announcement (31 January), shares in Saipem slid nearly 30% in early trading, having opened at €1.94.

The Italian firm is a relative newcomer to the wind power sector, but has been involved in floating platform design, foundation installation and jacket supply for large-scale wind farms.