Norwegian energy services contractor Subsea7 reported a strong financial performance in the third quarter, driven by effective project execution and a record-high backlog.

Financial Performance

Net income for the quarter reached $109 million, an 11% increase year-on-year. Adjusted EBITDA saw a significant rise of 27% year-on-year, amounting to $407 million. The company's Subsea and Conventional unit was highlighted for its solid execution and high utilization levels during this period.

Backlog and Order Intake

The company's total backlog remains at a record high of $13.91 billion. Order intake in the third quarter was substantial at $3.8 billion. The backlog is noted to be shifting towards contracts with a more favorable risk-reward balance, contributing to the company's resilience.

Strategic Outlook and Guidance

The company's strategy is focused on long-cycle energy projects with advantaged economics, which is demonstrating resilience. Positive momentum is expected to continue, supported by the strong project backlog and active tendering opportunities. Consequently, Subsea7 has raised its revenue guidance for 2025 to between $6.9 billion and $7.1 billion, and its adjusted EBITDA margin guidance to between 20% and 21%.

Merger with Saipem

The proposed merger with Italy's Saipem, approved by Subsea7 shareholders, is progressing. The new entity will be owned 50:50 by both sets of shareholders, combining Saipem's global onshore and offshore capabilities with Subsea7's world-leading offshore business. The transaction is currently undergoing regulatory controls, with completion anticipated in the second half of next year.

Analyst Perspective

Analysts expressed positivity regarding the synergies and growth opportunities expected from the merger. However, they tempered near-term performance expectations due to the unpredictable nature of the offshore wind market.

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