Vi tror Subsea 7 vil ha lavere vekst enn konkurrentene

Vi mener Subsea 7 står ovenfor utfordringer som vil medføre lavere vekst enn hos konkurrentene. 

Allen Good 24.08.2015 | 11:08

Subsea 7 is one of three major engineering and construction firms servicing the oil and gas industry with subsea installation vessel capabilities. While we continue to believe that subsea development will fare better than offshore exploration activities, we think Subsea 7 faces challenges that will translate into slower growth than peers.

Size is crucial for winning tenders and managing project risk, and Subsea 7 is smaller than competitors Technip and Saipem. The 2011 merger with Acergy helped, expanding the firm’s vessel fleet and enabling it to take on larger projects. Project backlog of $8 billion, with half of that hitting execution in 2015, provides a clear runway, but the company's backlog trails the $20 billion-plus backlogs of competitors Saipem and Technip. Because it is smaller, Subsea 7 is less able to take on the largest infrastructure projects the industry could offer, due to revenue concentration over a small number of projects that would substantially increase the degree of execution risk on earnings.

To further expand its asset base and ability to increase backlog, the firm is in the midst of spending $900 million through 2016 to expand its vessel fleet by five additional ships. Though this is obviously a detriment to near-term cash flow, we think additional vessels from Subsea 7 and others (Technip has nine vessels under construction currently) could prevent improved pricing power in the near to mid-term. This new supply, combined with lower demand due to sagging commodity prices, may limit Subsea 7’s ability to expand margins, in our opinion. We’d prefer pursuit of a strategy that enhances its engineering capabilities, including a merger with a well-established E&C firm that does not own a vessel fleet, such as Fluor or Petrofac.

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Verdipapirer nevnt i artikkel

Navn på verdipapirPrisEndring (%)Morningstar Rating
Saipem SpA1,94 EUR-1,82
Subsea 7 SA71,46 NOK-1,27
TechnipFMC PLC7,23 EUR0,50

Om forfatteren

Allen Good

Allen Good  er senior aksjeanalytiker hos Morningstar, og han dekker olje- og gassindustriene. 

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