Italy's Saipem pulls outlook on coronavirus uncertainty

MILAN (Reuters) - Italian oil and gas contractor Saipem SPMI.MI said on Wednesday it had pulled its outlook for the year due to growing uncertainty created by the COVID-19 emergency.

In a statement, the company said its board had acknowledged the pandemic might trigger a sharp fall in demand and a delay in projects.

The world’s biggest oil and gas companies are cutting spending this year following a collapse in oil prices driven by a slump in demand because of the coronavirus as well as a price war between top exporters Saudi Arabia and Russia.

Saipem said it had become hard to estimate the impact of the crisis “on the commercial and operating activities of the company and consequently on its asset value, economic and financial results”.

The group, controlled by Italian state lender CDP and oil major Eni ENI.MI, said it reserved the right to issue new guidance should market conditions become more stable.

In February Saipem said it expected higher sales this year after it beat 2019 targets and introduced a dividend for the first time in seven years.

The company, a market leader in subsea engineering and construction, has been looking to develop new lines of business to boost order books, including renewable energy projects.

It said on Wednesday its backlog and balance sheet remained very solid and it had sufficient liquidity to support operational needs.

It also said that as regarded its debt there were no significant maturities in 2020 and 2021, following the early redemption of a 500 million euro bond maturing in 2021.

The group will unveil its first-quarter results next week.

Reporting by Stephen Jewkes; Editing by Leslie Adler