Saipem's stock moved higher following the release of first quarter financials that were broadly in line with market expectations. The company reported total revenues of EUR3,528 million for the quarter, a roughly 3% shortfall against consensus estimates which management attributed to timing and mix rather than a deterioration in demand.
On profitability metrics, adjusted EBITDA reached EUR434 million - about 2% above consensus. Adjusted EBIT lagged, at EUR157 million, falling 10% short of estimates due to elevated depreciation and amortization charges of EUR277 million.
Segment results
- Asset Based Services: Adjusted EBITDA was EUR333 million, beating consensus by 3%, with margins expanding to 16.5%. The division benefited from what management described as solid execution in North Africa and Asia Pacific.
- Energy Carriers: This unit posted adjusted EBITDA of EUR29 million, an 18% beat versus consensus, supported by improved cost control measures.
- Offshore Drilling: Adjusted EBITDA came in at EUR72 million, broadly in line with expectations but down year-on-year due to planned maintenance activity.
Order flow and backlog
Order intake for the quarter totaled EUR1,669 million, translating to a book-to-bill ratio of 0.5x. Backlog declined to EUR29.6 billion from EUR31.5 billion in the fourth quarter. Management indicated they expect awards to pick up from the second quarter onwards, with Asset Based Services singled out as an area where activity should accelerate.
Balance sheet and cash generation
Net debt on a post-IFRS16 basis improved materially to EUR23 million from EUR272 million at the end of the prior quarter. The improvement was supported by free cash flow generation of EUR199 million after lease repayments.
Guidance and risks
Saipem reiterated its fiscal 2026 targets of roughly EUR15.5 billion in revenues and about EUR1.9 billion in EBITDA. Management warned of a concrete geopolitical risk - a prolonged closure of the Strait of Hormuz - which could disrupt logistics, feed into inflationary pressure and affect project timing. At the same time, the company noted that global energy investment could present stronger medium-term opportunities.
Takeaway
The quarter showed resilient adjusted EBITDA and a notable swing in net debt, underpinned by cash generation, while revenue missed slightly on timing and mix. Segment performance was mixed but Asset Based Services stood out for margin expansion. Order intake and backlog declines leave near-term visibility limited, although management expects improvement in awards in the coming quarters.