April 26, 2018 / 7:10 AM / 2 years ago

Subsea 7's Q1 lags, repeats guidance

OSLO, April 26 (Reuters) - Offshore oil services firm Subsea 7 posted first-quarter results that missed expectations due to lower activity but maintained its outlook for the year, sending its shares lower.

Its adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) fell to $103 million, lagging expectations for $157 million in a Reuters poll of analysts, and down from $268 million in the same period a year ago.

“The lower revenue and adjusted EBITDA compared to the prior year reflected deterioration in activity levels due to seasonality of northern hemisphere operations and fewer large projects progressing with offshore campaigns,” the company said in a statement.

While activity in the oil and gas industry is recovering from very low levels in the last three years, pricing remains challenging in the near term, Subsea 7 added.

The company repeated that it still expected 2018 revenue to be in line with 2017, while its adjusted EBITDA margin, which stood at 26 percent last year, would be significantly lower.

On April 17 the Oslo-listed firm made an unsolicited offer to acquire Houston-based McDermott for $2 billion, but the U.S. rival has rejected the proposal repeatedly.

Subsea 7’s chairman, Norwegian billionaire Kristian Siem, who owns a fifth of the company, has long called for the industry to consolidate as a means to cope with cost-cutting by oil companies. (Reporting by Nerijus Adomaitis, editing by Gwladys Fouche)

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