Middle East

Saipem rethinks green push after profit

Italy’s Saipem plans to take a more cautious approach to new green businesses after a delay in a wind power project has urged energy contractors to warn of profits, two sources close to the problem. Said on Wednesday.

Saipem, [company specializing] We have turned to offshore wind as part of a shift in focus to address the growing customer interest in green technology in undersea exploration and construction, and in providing services to the oil industry.

However, renewable energy is difficult to migrate because it requires a different set of skills to guarantee the kind of benefits that Saipem has achieved from the traditional fossil fuel business.

Last month, Saipem downgraded its revenues by € 1 billion ($ 1.14 billion) as margins on some contracts, including offshore wind, “deteriorated significantly.”

Francesco Caio, the company’s CEO, has been forced to withdraw the plan just announced in October, and the company is competing with advisor Rothschild to develop a turnaround strategy. ..

Speaking on condition of anonymity due to problem sensitivity, one source said that Saipem could focus more on legacy businesses with established expertise and learn new skills needed for renewable energy businesses. He said he needed to spend a lot of time.

Second sources say that offshore wind margins could improve, but at the risk of companies that need time to gain experience.

Saipem declined to comment.

Saipem’s problem focuses on the challenges faced by energy contractors when trying to manage the transition of renewable energy products to services without sacrificing other parts of the business.

Problems with the seafloor foundation have delayed Saipem’s support for the construction of the French EDF and the Irish ESB at the Niatonagaoite wind farm off the coast of Scotland.

On Wednesday, Italy’s Daily Il Sol Le 24 Ole said that Saipem’s new general manager outlined to the board the steps necessary to turn the contractor, including a new focus on legacy work.

“We believe the market appreciates the focus on backlog risk mitigation,” Bunka IMI analyst Roberto Lanieri said in a research note.

Managed by energy group Eni and state lender CDP, Saipem will present a revised business plan on March 16 that is expected to include a capital increase and debt restructuring.

One source said the property was also being considered for disposal, but warned that current market conditions could make it difficult to sell. Saipem has previously stated that it is open to involving partners in the drilling business.

($ 1 = 0.8799 euros)

(Report by Stephen Jewkes, edited by Barbara Lewis)

https://www.oedigital.com/news/494367-report-saipem-to-rethink-green-push-after-profit-warning Saipem rethinks green push after profit

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