Home Business Saipem: what’s happening, a summary of the situation

Saipem: what’s happening, a summary of the situation

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Surprisingly, on Monday 31 January Saipem announced a maxi loss in 2021 accounts for over a third of the share capital (which amounts to 2.2 billion euros). To address these difficulties, Saipem’s board of directors has launched one new organizational structure with the aim of strengthening the financial structure and improving the executive capacity of projects. To support this delicate moment, the main partners also took to the field, Eni (largest shareholder with 30%) e Cassa Depositi e Prestiti (12.5%).

Saipem: recapitalization and new plan

In the immediate future, the company, which operates in the sector of services to oil companies, has to cope with hole in the budget which was created following the maxi loss and which according to analysts will require shareholders one recapitalization for at least 1 billion euros. Furthermore, in addition to resources on the capital front, they are also to be sought new financing to cover the maturing debt.

In parallel there is from rewrite an industrial plan that it updates the one presented last October and takes into account the problems that caused the hole in the budget just three months after its presentation.

According to an initial reconstruction of the company, the difficulties were caused by the slowdown of some works due to the pandemic and the surge of costs of raw materials. An explosive mixture that caused a chain drop in revenues and the erosion of profit margins. According to analysts, however, it seems difficult to imagine that these issues were not already evident at the top of the company during the October presentation to the market.

For Saipem, profit warnings are nothing new, so much so that in 2016 the company had to carry out a capital increase of 3.5 billion euros.

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New managers are coming

To strengthen Saipem’s management team and support the CEO Francesco Caio the major shareholders Eni and Cdp have made their own men available. In particular Alessandro Clean, arriving from Eni, he was appointed general manager of the company. But not only that, the arrival of Paolo Calcagnini, currently deputy director general of CDP. The manager will be entrusted with the new unit aimed at strengthening financial planning and control.

Saipem’s new organization provides for the establishment of a new general management with extensive operational and managerial powers, the establishment of a unit aimed at strengthening the planning and financial control of contracts and other management activities and the concentration of legal and negotiation activities in a corporate function within the new general management .

The results of the strategic review will be presented by Saipem on the occasion of the announcement of the preliminary consolidated results for 2021 scheduled for 24 February.

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Saipem at Piazza Affari

In the week the title Saipem left 38% on the ground of its value closing the session on Friday at 1.193 euros, at levels not seen since 1992. with a market capitalization down to 1.2 billion euros.

Among the analysts who have issued very severe judgments on the company’s operations are those of Kepler Cheuvreuxwhich expressed a reduced opinion on the Saipem share and a target price of 0.5 euro.
According to analysts, inflation and Covid are just excuses and this profit warning is the first important sign that the quality of his portfolio is very weak. “We fear an iceberg is being created that could lead to many negative elements, including a jumbo capital increase,” the experts pointed out.

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