* Saipem confirms 2014 EBIT at 600-750 mln euros
* To take hit of 40 mln euros from Brazil accident
* CEO reiterates 2014 will be transition year
(adds CEO and analyst comment, shares)
MILAN, April 24 Italian oil service group Saipem
said a charge relating to an offshore accident in
Brazil earlier this year would not stop it from meeting its 2014
Saipem said it will be hit with a 40 million euro ($55.32
million) charge for dropping a steel pipe into the Atlantic
Ocean and delaying efforts to expand an oilfield.
Saipem, 43 percent owned by oil major Eni,
delivered first quarter earnings on Thursday and confirmed
earlier guidance that it expects to report net profit of 280-380
million euros in 2014 after a restated net loss of 159 million
euros in 2013.
The company lost around half its market value last year
after two profit warnings triggered by lower-than-expected
margins and a probe into alleged corruption in Algeria.
"We confirm 2014 will be a transitional year but we are
creating the grounds for a recovery that will boost profits in
the medium term," Saipem CEO Umberto Vergine said in the
Earlier on Thursday French oil services group Technip
stuck to targets for this year after first quarter
sales beat its expectations.
Oil contractors have seen slimmer pickings in recent years
due to delays and overspending at mega projects such as the
giant Kashagan oilfield in Kazakhstan.
Saipem is looking to phase out unprofitable legacy projects
and replace them with higher margin work.
In the first three months of the year new orders were 3.9
billion euros, Saipem said, adding orders acquired since the end
of March totalled more than 3 billion euros.
The company was awarded deals worth 2 billion euros in March
to build a first underwater stage of the giant South Stream
project that will carry Russian gas into Europe, bypassing
Saipem's net profit in the first quarter fell 44.5 percent
to 61 million euros ($84 million), above an average consensus of
five analysts polled by Reuters of 51 million euros.
"The results were pretty much in line with our expectations
except for the higher debt but that should come down as new high
margin contracts come in," one Milan-based analyst said.
Debt at the end of March was around 5.6 billion euros
compared to 4.7 billion euros at the end of 2013.
Sources have told Reuters Eni, which currently consolidates
the whole of Saipem debt, is considering moves to make its
subsidiary financially independent.
At 1529 GMT Saipem shares were up 3.6 percent while the
European oil and gas sector was up 1 percent.
($1 = 0.7231 Euros)
($1 = 0.7231 Euros)
(Reporting by Stephen Jewkes; Editing by Elaine Hardcastle)