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Subsea 7 SA SUBC
Q3 2012 Earnings Call Transcript

Transcript Call Date 11/19/2012

Operator: Ladies and gentlemen, thank you for standing by and welcome to the Subsea 7 S.A. Third Quarter 2012 Results. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. I must advice you all this conference is being recorded today on Monday 19 of November 2012.

I'd now like to hand the conference over to your first speaker today Mr. Paul Gooden. Please go ahead, sir.

Paul Gooden - IR: Thank you and good afternoon, everyone. This is Paul Gooden, Investor Relations Officer at Subsea 7. Joining us today are Jean Cahuzac, our Chief Executive Officer; and Ricardo Rosa, our Chief Finance Officer. Today's results are for the third quarter and nine months period which ended September 30, 2012. The press release can be found on our website with the presentation slides we'll be referring to in today's call.

Before we start the presentation, I'd remind you that certain statements made in the course of this conference call, which express the Company's intentions, beliefs and expectations, are forward-looking statements. Future results and trends could differ materially from those which are in such statements for various factors. Details of these can be found in the Company's filings, including the Company's Annual Report.

May I also draw your attention to the more detailed disclosure on forward-looking statements that appeared in today's press release. To remind you, the call will run for one hour.

With that, I'll hand you over to Jean.

Jean Cahuzac - CEO: Thank you, Paul, and good afternoon to everybody. I would like to make a few observations on our results and the markets before Ricardo run through our financials. I will then comment on outlook and our strategy before we turn to your questions.

First, I'm pleased with the quarter results. We have seen high activity level in the North Sea, and it was another good quarter in Africa. Asia results were impacted by a mechanical equipment sailor on the Rockwater 2, problem has now been solved and the vessel is back to operations.

As expected Brazil continue – Brazil results continue to be impacted by the Guara Lula project which is ramping up but continued to be executed at their own margin. Very good vessel utilization at 88%, a record level for the Group. So, overall, a good set of results for the third quarter in line with our expectations.

At the end of the quarter we had $8.1 billion backlog. We see significant opportunities for further growth as more large projects are expected to be awarded to the market in the coming months. We have positive news since quarter end with over $1.3 billion of announced order so far, the highlight being the award of Martin Linge which is a biggest award ever in the North Sea. Another important point is the overall quality of our backlog which continues to improve as we remain disciplined in our approach for bidding new projects.

So turning now to the market, we continue to see no impact from global macroeconomic uncertainties on our (clients plan). We still expect the present high level of bidding activity to translate to market awards later this year and early 2013 in particular in the North Sea, Africa and Brazil. The medium-term growth opportunity ahead of us is significant and the cycle continues to improve.

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