Company Reports

Subsea 7 specializes in offshore engineering and construction. The firm handles the majority of operations for offshore oil and gas projects, from design to fabrication and installation to maintenance. It’s one of a few firms with the requisite capacity and technological capability to execute the notoriously complex offshore projects.

No-moat-rated Subsea 7 posted solid first-quarter results. Subsea and conventional revenue rose 12% year on year to $1.2 billion, while renewables revenue similarly increased by 12% year on year to $179 million. Strong offshore oil and gas revenue supported firmwide revenue of $1.4 billion, which was offset by winter-weather-related seasonality in the renewables business unit. After our initial review of these and other financial results, we don't anticipate materially changing our NOK 196 fair value estimate or moat rating.

Upon initial review, nothing in no-moat rated Subsea7’s latest results materially alters our long-term view of the firm. For now, we maintain our NOK 196 fair value estimate. Fourth-quarter revenue of $1.63 billion increased 26% year on year and marginally exceeded our expectations on higher subsea revenue, though renewables underperformed. Even on higher revenue, however, adjusted EBITDA came in quite a bit below our fourth-quarter expectations.

Subsea 7 specializes in offshore engineering and construction. The firm handles the majority of operations for offshore oil and gas projects, from design to fabrication and installation to maintenance. It’s one of a few firms with the requisite capacity and technological capability to execute the notoriously complex offshore projects.

Subsea 7 remains on track to meet it’s 2023 goals as robust demand for offshore vessels and subsea services persists around the world. Management issued preliminary guidance for the next two years, including reiterated confidence for continued margin expansion, with the firmwide adjusted EBITDA margin will approaching 20% by the end of 2025.

Subsea 7 specializes in offshore engineering and construction. The firm handles the majority of operations for offshore oil and gas projects, from design to fabrication and installation to maintenance. It’s one of a few firms with the requisite capacity and technological capability to execute the notoriously complex offshore projects.

Subsea 7 continues to benefit from the early stages of the long-awaited upcycle in offshore oil and gas production. We’re raising our fair value estimate to NOK 161 from NOK 153 due to improved confidence in the firm’s potential for significant revenue and margin expansion over the next five years. We now estimate annual revenue growth will average 6.5% through 2027 with operating margins averaging 5.5%, compared to our prior estimates of 6% and 4%, respectively. We maintain our no-moat rating following results.

Subsea 7 specializes in offshore engineering and construction, in which the firm handles the majority of operations in offshore projects, from design to fabrication and installation to maintenance. It’s one of a few firms with the requisite capacity and technological capability to execute the notoriously complex offshore projects.

Subsea 7 specializes in offshore engineering and construction, in which the firm handles the majority of operations in offshore projects, from design to fabrication and installation to maintenance. It’s one of a few firms with the requisite capacity and technological capability to execute the notoriously complex offshore projects.

Subsea 7’s first-quarter performance fell in line with expectations, and the firm remains on track to post a strong 2023 as global offshore contracting activity accelerates. Compared with the first quarter of 2022, total revenue increased 4% and the firmwide adjusted EBITDA margin expanded about 140 basis points. Performance was weaker on a sequential basis, with revenue and adjusted EBITDA decreasing 3% and 450 basis points, respectively. An activity mix skewed toward lower-margin projects contributed to the decline on top of standard seasonal impacts. We’ll incorporate the firm’s full financial and operating results shortly, but after this first look, we maintain our no-moat rating and fair value estimate of NOK 153.

Subsea 7 concluded 2022 on solid footing as annual revenue and adjusted EBITDA increased 3% and 7%, respectively. Offshore production activity has started to pick up speed around the world and will likely continue to gain momentum over the next several quarters. We’re raising our fair value estimate to NOK 153 per share from NOK 136 following results. We maintain our no-moat rating.

Subsea 7 specializes in offshore engineering and construction, in which the firm handles the majority of operations in offshore projects, from design to fabrication and installation to maintenance. It’s one of a few firms with the requisite capacity and technological capability to execute the notoriously complex offshore projects.

Subsea 7 posted solid third-quarter results, with revenue slightly decreasing by 3% year over year and increasing 13% sequentially. The firmwide operating margin was 4%, decreasing by 50 basis points year over year and increasing 240 basis points sequentially. We’re slightly raising our fair value estimate to NOK 136 from NOK 134 as improving offshore production activity worldwide continues to yield valuable prospects for Subsea 7 over the next several years.

Subsea 7 specializes in offshore engineering and construction, in which the firm handles the majority of operations in offshore projects, from design to fabrication and installation to maintenance. It’s one of a few firms with the requisite capacity and technological capability to execute the notoriously complex offshore projects.

Subsea 7 delivered solid second-quarter results, posting revenue growth of 4% on a sequential and year-over-year basis. Firmwide operating margin was 1%, compared with negative 3% last quarter and negative 2% last year. We’re raising our fair value estimate to NOK 134, almost entirely due to the improved strength of the U.S. dollar against the Norwegian krone, without which our fair value estimate would be otherwise unchanged. Our no-moat rating and stable moat trend are unchanged.

Subsea 7 specializes in offshore engineering and construction, in which the firm handles the majority of operations in offshore projects, from design to fabrication and installation to maintenance. It’s one of a few firms with the requisite capacity and technological capability to execute the notoriously complex offshore projects.

Subsea 7’s first-quarter results were in line with expectations but indicated improvements in offshore activity. Quarterly revenue fell 13% sequentially but improved 20% year over year to $1.2 billion. We maintain our fair value estimate of NOK 120 and our no-moat rating.

Subsea 7 specializes in offshore engineering and construction, in which the firm handles the majority of operations in offshore projects, from design to fabrication and installation to maintenance. It’s one of a few firms with the requisite capacity and technological capability to execute the notoriously complex offshore projects.

After reviewing Subsea 7’s operating and financial results for 2021, we’re raising our fair value estimate to NOK 120 from NOK 111. We maintain our no-moat rating and stable moat trend.

Subsea 7 specializes in offshore engineering and construction, in which the firm handles the majority of operations in offshore projects, from design to fabrication and installation to maintenance. It’s one of a few firms with the requisite capacity and technological capability to execute the notoriously complex offshore projects.