The Italian multinational drilling services company and subsidiary of ENI ‘sank’ this Wednesday on the Italian Stock Exchange (known as Piazza Affari) after the presentation of first quarter results well below expectations, overshadowed by the inability to confirm estimates for 2021 due to uncertainties related to the LNG project in Mozambique.
At around 9.50 am, shares in the oil company controlled by Eni and Cdp, fell 7.8% to €1.98, after hitting a low of €1.87, returning to the lows of late November 2020.
In a press release the group said it could not confirm or update estimates for 2021 “due to uncertainties related to the Mozambique LNG project after Total declared force majeure to stop the project, considering the evolving security situation in the north of Mozambique’s Cabo Delgado province. In addition, the company ended the first quarter with adjusted net income (without extraordinary items) at a loss of 105 million (down 9 million from Q1 2020).
Brokerage firm Bestinver expects a “negative reaction on the stock due to significantly lower than expected quarterly results in terms of revenue and margins and higher project-related risks in Mozambique,” they note to conclude, “We are witnessing another weak quarter, sequentially worse than the 2020 fourth quarter, with the addition of the issues in Mozambique.”
Saipem is a company specializing in engineering, drilling and construction services for major projects in the energy and infrastructure sectors.
It is listed on the Milan Stock Exchange and operates in more than 70 countries worldwide (including Mozambique), employing 34,000 employees of 120 different nationalities.
Saipem is present in Mozambique as part of the CCS JV, a joint venture that has the engineering, procurement and onshore construction contract for the development of Area 1 Mozambique LNG, which also includes Japan’s Chiyoda and the US company McDermot and whose main subcontractors are IFS, SubTech, Renco, Dorce, Besix, WBHO and the Portuguese companies Mota Engil, Zagope and Gabriel Couto.
