Subsea 7 S.A. announced Wednesday that its third quarter revenue of $1.2 billion was $702 million lower than the prior year quarter, due to a reduced workload as a result of the sustained downturn in oil company expenditure.
The company, which expects its revenue in 2016 to be “significantly lower” than the group's forecast for 2015, reported that global vessel utilisation was 74 percent in 3Q, reflecting a reduction in life of field work in the Northern Hemisphere and reduced activity levels as certain projects completed their offshore phases.
Subsea’s backlog at September 30 was $6.7 billion and order intake was $1.1 billion. Cash generated from operating activities in the quarter was $409 million, which resulted in cash and cash equivalents of $657 million and net cash of $104 million as at 30 September. The company’s cost reduction and resizing program, announced in May, is on track to deliver approximately $550 million of annualised cost savings, according to Subsea.
Jean Cahuzac, Subsea 7 chief executive officer, commented in a company statement:
“Subsea 7 has delivered another quarter of good results in the three months to 30 September, despite the continuation of difficult industry conditions and resultant decline in market activity, with strong operational performance in both business units driven by consistently good project execution.
“The fundamental long-term outlook for deepwater subsea field developments remains intact despite the challenges facing the industry as a result of the lower oil price. Subsea 7, in partnership with clients and suppliers, continues to develop innovative solutions to lower the cost base such that projects can become viable in the current low oil price environment."
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