Subsea engineering, construction and services company Subsea 7 increased its revenues during the first quarter 2017 by 20 percent while its net profit remained in line with the prior-year period.
The subsea company on Thursday posted a profit of $146 million for the first quarter 2017, versus a $147 million profit in the corresponding period of 2016.
Net income benefited from a re-measurement gain on business combination of $42 million related to the acquisition of Seaway Heavy Lifting offset by a decrease of $25 million in net operating income compared with 1Q 2016; and a net foreign currency loss of $7 million in 1Q 2017, recognized within other gains and losses, compared to a $12 million gain in 1Q 2016.
The company’s revenues increased by $151 million during the first quarter 2017 totaling $897 million, compared to $746 million in the year-before period.
The increase in revenue was within the Renewables and Heavy Lifting Business Unit and mainly related to the Beatrice wind farm installation project, which was partially offset by lower activity levels within the SURF and Conventional and i-Tech Services Business Units, which dropped by 6% and 27%, respectively.
During the quarter, backlog increased to $5.72 billion versus $5.69 billion in last year’s quarter.
The backlog included the addition of $285 million as a result of the acquisition of Seaway Heavy Lifting, partially offset by the cancellation of $106 million from the order backlog due to early termination of the day-rate contract for Seven Mar due to Brazilian maritime law that prioritizes Brazilian-flagged vessels over international vessels of a similar specification.
The company’s total vessel utilization for the quarter was 55% which was in line with 1Q 2016. Active vessel utilization, which excludes stacked vessel days, was 65% compared to 71% in 1Q 2016.
Three vessels joined the fleet in the quarter with delivery thereby completing the group’s vessel construction program. The PLSV Seven Cruzeiro immediately started its long-term contract offshore Brazil and both Seven Arctic and Seven Kestrel completed crew familiarization before mobilizing for their first projects shortly after the quarter end.
Two vessels, Seven Discovery and Normand Oceanic, were released from the fleet and having completed its activities in Brazil, Seven Mar, was stacked in the quarter.
Looking ahead, the company stated that, assuming a sustained oil price improvement and that cost reductions identified by the industry are consistently achieved, there is still cause to believe that the number of SURF project awards to the market could increase within the next 12 months.
Offshore Energy Today Staff