Saipem rewarded after $1 billion contract in Indonesia
The announcement is appreciated by analysts, as it demonstrates the company's leadership and gives more visibility on the 2025-27 estimates
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(Il Sole 24 Ore Radiocor) Saipem,well-performing at Piazza Affari, celebratesthe $1 billion offshore contract in Indonesia. The stock rose in a market down about half a percentage point. The contract - won in consortium with Pt Meindo Elang Indah - covers the Tangguh Ucc project, which includes development of the Ubadari field, gas recovery through carbon capture, utilisation and storage, and onshore compression, operated by BP in Indonesia. The value of the contract is about $1.2bn andSaipem's share amounts to about $1bn. Saipem's activities include the engineering, procurement, construction and installation of two wellhead platforms, a Co2 reinjection platform and approximately 90km of associated pipelines. "The news has positive implications on the visibility of the 2025-27 estimates," they say from Equita, which has a hold rating on the stock with a €2.40 target price. For Banca Akros (which has a buy with €3 target price), the contract 'is large and confirms both the positive market scenario and the company's leadership in offshore natural gas and Co2 capture and storage projects'. With this contract, say Intermonte, 'order intake since the beginning of the year should be around EUR 16.5bn'. For 2024, analysts assume order intake at EUR 17.2bn and confirm a buy rating on the stock with a target price of EUR 3. Equita points out that the 2024 order intake of the offshore E&C rises to about EUR 12.3bn. According to Saipem, the utilisation of the offshore E&C fleet is at full capacity in 2025-26 while on 2027-28 it had a good level of utilisation. "We estimate," says Equita, "that the contract has a lower margin than the division average (12%)".
