Subsea 7 Shares Surge On Special Dividend, Q4 Earnings Beat
OSLO, March 2 (Reuters) - Oslo-listed oil services firm Subsea 7 reported forecast-beating core earnings on Thursday and announced plans to pay a special dividend, sending its shares surging to the highest level since 2013.
The maker of seabed equipment and pipes for oil and gas extraction has sharply cut staff numbers in recent years to contend with falling demand from energy firms following a plunge in oil prices of more than 50 percent.
The company said its board would recommend a one-off dividend of 5 Norwegian crowns per share, equivalent to a total payout of about $200 million, reflecting a strong operating performance and good liquidity.
The firm's shares were up 10 percent at 130 crowns at 0842 GMT, its highest level in three-and-a-half years and on track for their biggest one-day rise since early 2009.
Brokerage Pareto, with a "buy" rating on Subsea 7, said strong project execution and the first dividend payment since 2013 helped to trigger the positive reaction. Brokers Carnegie, which also recommends "buy", said Subsea 7's stock could hit 150 crowns near-term and as much as 200 crowns later this year.
Subsea 7 reported adjusted earning before interest, tax, depreciation and amortisation of $288 million for the fourth quarter, 54 percent ahead of the average forecast of $187 million in a Reuters poll of analysts.
"This performance reflected successful implementation of our cost reduction measures, while maintaining high standards of execution and preserving the group’s expertise and capability," Subsea 7 Chief Executive Jean Cahuzac said.
Since the start of 2014, the company's workforce has been cut by over 40 percent to some 8,000 by early 2017, while it has reduced its fleet by 12 vessels, including four mothballed vessels, to 33 vessels.
The company maintained its guidance for 2017 revenues to be in line with 2016 and for a drop in operating margins. It said there were prospects for an increase in subsea project awards within the next 12 months as oil prices have stabilised.
Brokerage Bernstein said that while the latest numbers were good, Subsea 7's prospects were uncertain, and hence reiterated an "underperform" rating.
Siem Industries, the holding firm of Subsea 7 Chairman Kristian Siem and his family, is the company's top shareholder with a stake of 21.3 percent.
(Reporting by Nerijus Adomaitis, editing by Terje Solsvik and Jane Merriman)
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds
- Gunvor CEO Sees Russian Refining Capacity Taking Hit from Drone Strikes
- These Factors Helped Brent Oil Price Break Above $85
- Sinopec Engineering Posts Higher Annual Petrochemicals Revenue
- Imperial Pipeline in Winnipeg Goes Offline for Three Months
- Gaz System to Acquire Gas Storage Poland
- Subsea7 Secures Contract to Service Woodside's Trion
- Adnoc Inks Supply Deal for Ruwais LNG Project with Germany's SEFE
- India Buying More USA Oil as Sanctions Stifle Russian Flows
- EIA Boosts USA Crude Oil Production Forecasts
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- EIA Drops 2024 Henry Hub Gas Price Forecast
- EIA and Standard Chartered Offer Up Latest Oil Price Predictions
- Red Sea Region Sees Another Watershed Incident
- Chevron Oil Project in Kazakhstan to Cost $48.5B
- OPEC Voices Encouragement after IEA Affirms Support for Oil Security
- Biden Govt Bares Strategy for Freight Charging, Hydrogen Fueling Infra
- Rystad Looks at the Buzz Around White Hydrogen
- Ukraine Hits Third Russian Refinery In Escalating Drone Strikes
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Is Peak Oil Demand Close?
- Vessel Sinks in Red Sea After Missile Strike
- JP Morgan, Standard Chartered Reveal Latest Oil Price Forecasts
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Rystad Forecasts Net Production of Top Permian Producers in 2024
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension