Subsea 7 Earnings: Robust Contracting Activity Signals Upswing in Offshore Oil and Gas Production

Subsea 7’s first-quarter performance fell in line with expectations, and the firm remains on track to post a strong 2023 as global offshore contracting activity accelerates. Compared with the first quarter of 2022, total revenue increased 4% and the firmwide adjusted EBITDA margin expanded about 140 basis points. Performance was weaker on a sequential basis, with revenue and adjusted EBITDA decreasing 3% and 450 basis points, respectively. An activity mix skewed toward lower-margin projects contributed to the decline on top of standard seasonal impacts. We’ll incorporate the firm’s full financial and operating results shortly, but after this first look, we maintain our no-moat rating and fair value estimate of NOK 153.