Saipem reviews the backlog (unexecuted orders) and withdraws the outlooks announced on October 28, 2021. Saipem communicates this in a note, explaining that the 2021 statutory financial statements expected to show a loss for more than one third of the share capital. After the announcement, the stock collapsed in Piazza Affari with a theoretical slip of up to 26%. Back in trading, the stock lost 29% in the late morning. Sources close to CDP, a shareholder with just under 13%, say the company is closely monitoring the situation in coordination with Eni, the majority shareholder with just over 30%.
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Among the causes of the deterioration of the accounts, the freeze registered in Mozambique, a project worth 4 billion announced in April last year. Preliminary estimates still in progress show, with respect to the outlook communicated to the market on October 28, 2021, aConsolidated adjusted EBITDA (EBITDA) in the second half of 2021 down by approximately € 1 billion compared to the positive consolidated adjusted EBITDA outlook, a reduction entirely attributable on the one hand to the backlog review for Onshore E&C projects for which the increase in costs for materials and logistics, depending on the types of contracts, only partially recoverable, and on the other hand to the recent further difficulties of offshore wind projects, where impacts from critical supplies are combined with revision of estimates of execution times and costs.
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Now the group has to deal with a possible recapitalization and a realignment of relations with the banks. Once the statutory and consolidated preliminary financial statements have been completed and approved as soon as possible, Saipem’s board of directors will call the shareholders’ meeting for the appropriate provisions pursuant to the law. Saipem has initiated preliminary contacts with banking counterparties in order to treat in advance the potential effects on loan agreements resulting from the occurrence of the case referred to in art. 2446 of the civil code. It also initiated preliminary contacts with the shareholders who exercise joint control over the Company, Eni and Cdp Industria, in order to also verify their willingness to participate in a timely and adequate financial maneuver.
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Saipem’s board of directors, chaired by Silvia Merlo, met over the weekend to examine the scenarios arising from the work in progress by the management for the preparation of the preliminary consolidated results as at 31 December 2021. The backlog review launched by the management in anticipation of the final assessment of the results of the progress of the orders acquired in the past years, highlights the current and prospective increase in the costs of raw materials and logistics, due to the persistence of the context of the pandemic. a significant deterioration in the economic margins of some projects relating to Onshore E&C and Offshore wind with a consequent effect on Saipem’s consolidated economic results.
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Among the causes of the deterioration of the accounts, the freeze registered in Mozambique, a project worth 4 billion announced in April last year. Preliminary estimates still in progress show, with respect to the outlook communicated to the market on October 28, 2021, aConsolidated adjusted EBITDA (EBITDA) in the second half of 2021 down by approximately € 1 billion compared to the positive consolidated adjusted EBITDA outlook, a reduction entirely attributable on the one hand to the backlog review for Onshore E&C projects for which the increase in costs for materials and logistics, depending on the types of contracts, only partially recoverable, and on the other hand to the recent further difficulties of offshore wind projects, where impacts from critical supplies are combined with revision of estimates of execution times and costs.
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