(Adds share price move, analysts, detail)
OSLO, March 2 Oslo-listed oil services firm
Subsea 7 reported forecast-beating core earnings on
Thursday and announced plans to pay a special dividend, sending
its shares surging to the highest level since 2013.
The maker of seabed equipment and pipes for oil and gas
extraction has sharply cut staff numbers in recent years to
contend with falling demand from energy firms following a plunge
in oil prices of more than 50 percent.
The company said its board would recommend a one-off
dividend of 5 Norwegian crowns per share, equivalent to a total
payout of about $200 million, reflecting a strong operating
performance and good liquidity.
The firm's shares were up 10 percent at 130 crowns at 0842
GMT, its highest level in three-and-a-half years and on track
for their biggest one-day rise since early 2009.
Brokerage Pareto, with a "buy" rating on Subsea 7, said
strong project execution and the first dividend payment since
2013 helped to trigger the positive reaction. Brokers Carnegie,
which also recommends "buy", said Subsea 7's stock could hit 150
crowns near-term and as much as 200 crowns later this year.
Subsea 7 reported adjusted earning before interest, tax,
depreciation and amortisation of $288 million for the fourth
quarter, 54 percent ahead of the average forecast of $187
million in a Reuters poll of analysts.
"This performance reflected successful implementation of our
cost reduction measures, while maintaining high standards of
execution and preserving the group’s expertise and capability,"
Subsea 7 Chief Executive Jean Cahuzac said.
Since the start of 2014, the company's workforce has been
cut by over 40 percent to some 8,000 by early 2017, while it has
reduced its fleet by 12 vessels, including four mothballed
vessels, to 33 vessels.
The company maintained its guidance for 2017 revenues to be
in line with 2016 and for a drop in operating margins. It said
there were prospects for an increase in subsea project awards
within the next 12 months as oil prices have stabilised.
Brokerage Bernstein said that while the latest numbers were
good, Subsea 7's prospects were uncertain, and hence reiterated
an "underperform" rating.
Siem Industries, the holding firm of Subsea 7 Chairman
Kristian Siem and his family, is the company's top shareholder
with a stake of 21.3 percent.
(Reporting by Nerijus Adomaitis, editing by Terje Solsvik and