OSLO, April 27 Oil services company Subsea 7
reported first-quarter margins that were better than
most investors had expected on Thursday and upgraded its
full-year profitability forecast, sending its shares eight
percent higher on Thursday.
The firm has been hit over the past three years by lower
demand from oil companies due to falling energy prices but a
recent recovery has helped recover some ground.
Subsea 7, which provides engineering and construction
services to the offshore oil industry, reported an earnings
margin before depreciation and amortisation of 30 percent for
the first quarter.
Brokers Pareto Securities said analysts had on average
predicted a margin for the quarter of only 20 percent.
Shares in Subsea 7 were up around 8 percent at 0810 GMT,
standing out in an otherwise flat Oslo benchmark index.
They are up by around a third so far this year.
Looking ahead, Subsea 7 said its adjusted earnings margin
this year was expected to be lower than the record level
reported in 2016. In March it had however said that the
percentage margin would be "significantly lower".
"Our early engineering activity has increased and we expect
this trend to continue as the market recovers in the future,"
the company said in a statement.
In the first quarter, Subsea 7 posted adjusted operating
profit before depreciation and amortisation of $268 million,
down from $284 million at the same time a year ago. Its backlog
was unchanged quarter-on-quarter at $5.7 billion.
No Reuters poll figures were available in this quarter as
Subsea 7 acquired in March the remaining 50 percent of Seaway
Heavy Lifting, changing its earnings reporting structure.