* Q1 core profit $241 meets expectations
* Projects delayed from Brazil to Mexico and Australia
* Cost pressures, skills shortages rising
(Adds CEO on state of various markets, analysts, shares)
OSLO, May 16 Offshore oil services firm Subsea 7
provided more evidence on Thursday of difficulties
this industry faces from project delays, cost pressures and
skill shortages even though oil exploration is booming.
The subsea business has been the strongest performer in the
global oil services industry but strains have started to show
recently as cost inflation and lower oil prices have prompted
some customers to rethink big and costly projects.
Subsea 7 Chief Executive Jean Cahuzac said Petrobras
was delaying major projects in Brazil, pricing
pressures were rising in Asia, and lower vessel utilisation in
the North Sea was reducing the impact of price increases.
"There continues to be delays in the awards by Petrobras of
projects ... There is uncertainty as to when the tenders will be
released," he said.
Subsea 7, which provides surface and subsea engineering and
construction services for oil firms around the world, is not
alone in highlighting these challenges.
Saipem, Europe's biggest oil services company,
shocked investors with a profit warning earlier this year
because of troubles from Brazil to Algeria.
Another rival Technip last month reported
disappointing earnings while Aker Solutions warned of
lower profits due to cost overruns and project delays.
Subsea 7 reported first quarter earnings in line with
expectations and said its order backlog grew to a record $10.2
billion in the quarter, which just missed analysts' expectations
for $10.7 billion.
First quarter earnings before interest, taxes, depreciation
and amortisation were up 7 percent at $241 million.
"Investors will have to weigh two 'opposing forces'...
strong cash flow generation in Q1 vs the company's cautious view
on the industry," Societe Generale said.
Subsea 7's shares are trading at 11 times forecast earnings
for 2014, a 20 to 25 percent discount to its long term trend,
reflecting uncertainty in the industry.
Rival Technip is trading at 13 times its 2014 earnings while
Saipem is at 14.4 times, according to Thomson Reuters data.
Subsea 7 shares traded down 0.8 percent by 1326 GMT,
underperforming a 0.4 percent rise in the broader index.
(Reporting by Balazs Koranyi; Editing by Greg Mahlich and Jane