Saipem under the lens after accounts and merger with Subsea7, focus on extraordinary coupon

(Il Sole 24 Ore Radiocor) - Under the lens Saipem at Piazza Affari after the release ofbetter-than-expected first-half accounts and the announcement of the signing of the merger agreement with Subsea7, which will create a big name in the energy services sector with €300 million a year synergies. With regard to the deal, Equita's experts point out that the note announces a newextraordinary dividend of 105 million in addition to the extraordinary dividend of 450 million already announced at the time of the merger MoU. "This would be," the brokers point out, "a dividend related to a divestment that was already planned at the time of the MoU and for which Subsea7 would be getting closer to signing, but was not yet known to the market because it was not yet mature. We believe that the announcement of the merger agreement is a positive catalyst for the stock'. In addition, 'the new extraordinary dividend marginally reduces the balance in Sub7's favour by 2% in the merger economic ratio'. Positive verdicts also from Intermonte, according to which the completion of the merger 'is positive news after some concern had emerged in the market in recent weeks about possible delays in the signing of the binding agreement. The only change with respect to the MoU is the distribution of an additional €105 million in dividends prior to closing to Subsea7 shareholders linked to ongoing divestments of minor assets. We confirm a positive view on the stock". Eni expressed its satisfaction for the announced merger of the investee company Saipem with Subsea7, which will lead to the creation of a newco named Saipem7: "We wish to express our great satisfaction for this further important step towards the creation of a global leader in engineering and construction, at levels of industrial and technological excellence, and we confirm our full support to the operation".

On the financial front, Saipem closed the first half of the year with revenue of EUR7.2 billion, ebitda of EUR764 million (+35%) and net profit of EUR140 million (+19%). Regarding orders, during the conference call, CEO Alessandro Puliti emphasised that 'in the second half of the year we expect to accumulate orders of eight billion. This will take us to 12 billion, which was our expectation for the full year. In the first half of the year we realised about 4.3 billion orders and we expect to be able to achieve the guidance issued in February. The focus will be on Carbon Capture and Storage of Co2 and the conversion of conventional refineries into biorefineries.

According to Equita"results confirm the sustained growth trend in offshore and are better than expected in terms of ebitda and order intake". The latter, although down, 'is better than expected'. The company also confirmed its estimates for the full year 2025 with revenues of about 15 billion, ebitda of about 1.6 billion, and operating cash flow (net of rents) of about 900 million. Investments of about 500 million and free cash flow (net of rents) of at least 500 million. "We expect the set of results to have no material immediate implications for our ebitda estimates for 2025, although we believe the outlook is conservative and may retain further improvements over the remainder of the year." This is because "seasonally, in the first half of the year Saipem develops 43-45% of the year's Ebitda, which would imply a result higher than the 1.6 billion of the guidance. In the first half, OpCF amounted to 675 million, a good 75% of the 2025 target," the experts explained.

Experts at Jefferies described the accounts as "fair and in line" with expectations. "Saipem closed a six-month period of further growth, confirming the steady progression of operating and financial performance over the last three years, which allowed, in May, the distribution of the highest dividend in the company's history," explain the brokers, who also recall the confirmation of the guidance for 2025. In particular, the experts point out that 'net debt for the second quarter of 2025, at EUR 205 million (post-IFRS16), is slightly below expectations. The Group's order backlog now stands at EUR 31.1 billion, down 5 per cent from EUR 32.7 billion in the first quarter and year-to-date, an all-time high." According to Intermonte, 'the results are above expectations on the ebitda level, weaker on the bottom line, due to higher depreciation/amortisation/adjustments and the negative contribution from equity investments'.