Subsea 7 S.A. Announces Third Quarter 2022 Results

Source: OMX
Subsea 7 S.A. Announces Third Quarter 2022 Results

Luxembourg – 17 November 2022 – Subsea 7 S.A. (the Group) (Oslo Børs: SUBC, ADR: SUBCY, ISIN: LU0075646355) announced today results for the third quarter which ended 30 September 2022.

Third quarter highlights  

  • Adjusted EBITDA of $171 million resulting in a margin of 12%
  • Backlog of $7.1 billion, of which $1.3 billion to be executed in Q4 2022 and $3.2 billion in 2023
  • Cash and cash equivalents of $533 million and net debt (including lease liabilities) of $33 million
  • Agreement to form a joint venture with SLB and Aker Solutions
  • Extension of Subsea Integration Alliance agreement until 2033 on completion of the joint venture transaction
  • Post quarter end, $650 million increase in liquidity for Seaway7 through an equity rights issue and new debt facilities that leaves its new-build programme fully funded
  Third Quarter Nine Months Ended
For the period (in $ millions, except Adjusted EBITDA margin and per share data) Q3 2022 Unaudited Q3 2021 Unaudited 30 Sep 2022
30 Sep 2021
Revenue 1,404 1,451 3,845 3,645
Adjusted EBITDA(a) 171 185 391 378
Adjusted EBITDA margin(a) 12% 13% 10% 10%
Net operating income 53 78 40 41
Net income 45 10 33
Earnings per share – in $ per share        
Basic 0.01 0.15 0.10 0.12
Diluted(b) 0.01 0.15 0.10 0.12
At (in $ millions)     30 Sep 2022
30 Jun 2022
Backlog(c)     7,123 7,796
Book-to-bill ratio(c)     0.7 1.6
Cash and cash equivalents     533 464
Borrowings     (362) (368)
Net cash excluding lease liabilities(d)     171 96
Net debt including lease liabilities(d)     (33) (88)

(a) For explanations and reconciliations of Adjusted EBITDA and Adjusted EBITDA margin refer to Note 8 ‘Adjusted EBITDA and Adjusted EBITDA margin’ to the Condensed Consolidated Financial Statements.

(b) For the explanation and a reconciliation of diluted earnings per share refer to Note 7 ‘Earnings per share’ to the Condensed Consolidated Financial Statements.

(c) Backlog is a non-IFRS measure. Book-to-bill ratio represents total order intake divided by revenue recognised in the third quarter. Comparative figure is for the quarter ended 30 June 2022.

(d) Net cash/(debt) is a non-IFRS measure and is defined as cash and cash equivalents less borrowings.

John Evans, Chief Executive Officer, said:

In the third quarter of 2022, Subsea7 delivered a strong performance in Subsea and Conventional while performance in Renewables stabilised. During the quarter an agreement to form a new joint venture was announced, involving the combination by SLB and Aker Solutions of their subsea hardware operations, and the acquisition by Subsea7 of a 10% interest in the new company for $306.5 million. The joint venture will replace SLB in Subsea Integration Alliance and our investment will strengthen the relationship with our partners. In addition, we expect an attractive return on investment on a standalone basis. The Subsea Integration Alliance agreement will be extended to 2033 on completion of the transaction.

In September, we announced a funding plan for our fixed offshore wind business, Seaway7. A combination of $200 million raised through the issuance of equity and $450 million of debt facilities leaves the business and its new-build vessel programme fully funded. Reflecting its strong outlook and reaffirming our belief that Seaway7’s shares are materially undervalued, Subsea 7 S.A. subscribed to 72.4% of the equity issue to maintain its shareholding. This was mirrored by the other major shareholders, Songa Offshore and Lotus Marine.

Together these steps strengthen our position across the energy landscape as demand for both traditional and new energy resources continues to grow.

Operational highlights

In the third quarter the Subsea and Conventional business unit made good progress in engineering and procurement activities on the Mero 3 and Marjan 2 projects in Brazil and Saudi Arabia respectively. Our global enabler vessels were active on projects including Sakarya in Turkey, Sangomar in Senegal and the Hywind Tampen floating wind development in Norway.

In the Renewables business unit, the fleet achieved high utilisation including the completion of monopile installation activities on Hollandse Kust Zuid (HKZ) in the Netherlands and Formosa 2 in Taiwan, in line with our Q2 projections. Our cable lay vessels were fully utilised on Seagreen in the UK, and on HKZ.

Third quarter financial review

Revenue of $1.4 billion was broadly flat compared to the prior year period reflecting robust levels of activity in both the Subsea and Conventional, and Renewables business units. Adjusted EBITDA of $171 million equates to an Adjusted EBITDA margin of 12.2%, down from 12.8% in Q3 2021, which benefited from a greater number of project close-outs. After depreciation and amortisation charges of $117 million, net operating income declined to $53 million. Net income for the quarter declined to breakeven from $45 million in the prior year, partly due to net foreign exchange losses of $25 million compared with a gain of $27 million in the prior year quarter, recognised within other gains and losses.

Net cash generated from operations was $210 million including an $87 million beneficial movement in net working capital. Net cash used in investing activities was $76 million, including $73 million related to purchases of property, plant and equipment. Net cash used in financing activities was $60 million which included share repurchases of $21 million. Overall, cash and cash equivalents increased by $69 million from 30 June 2022 to $533 million with net debt of $33 million, including lease liabilities of $204 million.

Third quarter order intake was $1.0 billion comprising new awards of $0.6 billion, escalations of $0.4 billion, and adverse foreign exchange movements of $0.2 billion, resulting in a book-to-bill ratio of 0.7. Backlog at the end of September was $7.1 billion, of which $1.3 billion is expected to be executed during the fourth quarter of 2022 and $3.2 billion in 2023.


We continue to expect that revenue and Adjusted EBITDA in 2022 will be broadly in line with 2021. We anticipate that revenue and Adjusted EBITDA in 2023 will be higher than 2022, with a weighting towards the second half.

The long-term outlook for both traditional and new energy is robust supported, in part, by the increased focus of European countries on energy security. After a prolonged period of underinvestment by the oil and gas industry, we see a gradual and durable improvement in demand for our subsea services. At the same time we expect limited new-build vessel capacity to enter our pipelay market. Demand for our fixed offshore wind services continues to increase underpinned by society’s push for lower carbon energy sources.

Subsea7 is well positioned to address both markets, with a large and capable fleet of young vessels. Availability of installation capacity for subsea and offshore fixed wind markets is already tight for 2024, and tightening for 2025, resulting in improved risk profiles, payment terms and margins relating to contracts recently awarded and under negotiation. Meanwhile, bidding activity remains high, with a tender pipeline of around $16 billion in subsea, up 20% on the prior year, and $7 billion in fixed offshore wind.

Conference Call Information
Date: 17 November 2022

Time: 12:00 UK Time

Access the webcast at

For further information, please contact:

Katherine Tonks
Head of Investor Relations
Telephone: +44 20 8210 5568

Special Note Regarding Forward-Looking Statements

Certain statements made in this announcement may contain ‘forward-looking statements’ (within the meaning of the safe harbour provisions of the U.S. Private Securities Litigation Reform Act of 1995). These statements relate to our current expectations, beliefs, intentions, assumptions or strategies regarding the future and are subject to known and unknown risks that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements may be identified by the use of words such as ‘anticipate’, ‘believe’, ‘estimate’, ‘expect’, ‘future’, ‘goal’, ‘intend’, ‘likely’ ‘may’, ‘plan’, ‘project’, ‘seek’, ‘should’, ‘strategy’ ‘will’, and similar expressions. The principal risks which could affect future operations of the Group are described in the ‘Risk Management’ section of the Group’s Annual Report and Consolidated Financial Statements. Factors that may cause actual and future results and trends to differ materially from our forward-looking statements include (but are not limited to): (i) our ability to deliver fixed price projects in accordance with client expectations and within the parameters of our bids, and to avoid cost overruns; (ii) our ability to collect receivables, negotiate variation orders and collect the related revenue; (iii) our ability to recover costs on significant projects; (iv) capital expenditure by oil and gas companies, which is affected by fluctuations in the price of, and demand for, crude oil and natural gas; (v) unanticipated delays or cancellation of projects included in our backlog; (vi) competition and price fluctuations in the markets and businesses in which we operate; (vii) the loss of, or deterioration in our relationship with, any significant clients; (viii) the outcome of legal proceedings or governmental inquiries; (ix) uncertainties inherent in operating internationally, including economic, political and social instability, boycotts or embargoes, labour unrest, changes in foreign governmental regulations, corruption and currency fluctuations; (x) the effects of a pandemic or epidemic or a natural disaster; (xi) liability to third parties for the failure of our joint venture partners to fulfil their obligations; (xii) changes in, or our failure to comply with, applicable laws and regulations (including regulatory measures addressing climate change); (xiii) operating hazards, including spills, environmental damage, personal or property damage and business interruptions caused by adverse weather; (xiv) equipment or mechanical failures, which could increase costs, impair revenue and result in penalties for failure to meet project completion requirements; (xv) the timely delivery of vessels on order and the timely completion of ship conversion programmes; (xvi) our ability to keep pace with technological changes and the impact of potential information technology, cyber security or data security breaches; and (xvii) the effectiveness of our disclosure controls and procedures and internal control over financial reporting. Many of these factors are beyond our ability to control or predict. Given these uncertainties, you should not place undue reliance on the forward-looking statements. Each forward-looking statement speaks only as of the date of this announcement. We undertake no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise.