Italian marine engineering outfit Saipem has withdrawn its outlook for the year and revised its order backlog due to “significant deterioration” in margins, including in offshore wind.
The company said the margin erosion, which is also affecting its E&C Onshore work, has been caused by “the persistence of the pandemic and the current and prospective increase of the costs of raw materials and logistics”.
Consolidated adjusted EBITDA for the second half of 2021 is down by approximately €1 billion compared to previous estimates, said the company, due in part to “recent further difficulties in offshore wind projects”.
“Impacts from delays in critical supplies are combined with revised estimates of execution times and costs” from the unnamed offshore wind projects, added Saipem.
Consolidated revenues for the second half of 2021 fell from €4.5 billion to €3.5 billion.
As a result, Saipem’s statutory financial statements for 2021 are expected to close with losses in excess of one-third of company’s equity, which triggers the application of Article 2446 of the Italian Civil Code.
This may give rise to the right of banks to accelerate the repayment of certain outstanding loans to the Saipem, said a statement.
Saipem has therefore initiated preliminary discussions with banking counterparties to “pre-empt the potential consequences on the loan agreements resulting from an occurrence of events”.
“Saipem has also initiated preliminary discussions with the shareholders exercising joint control over the Company, ENI S.p.A. and CDP Industria S.p.A., in order to ascertain also their willingness to support an appropriate and timely financing package,” stated the company.