July 25, 2018 / 7:07 AM / 2 months ago

Saipem eyeing engineering acquisitions in shift away from drilling

MILAN (Reuters) - Italian oil services company Saipem (SPMI.MI) said it is considering acquisitions in engineering and construction as it shifts its business away from drilling activity, which has dragged on earnings.

FILE PHOTO: Drilling vessel Scarabeo 9, owned by Italian oil service group Saipem, sails in the Bosphorus in Istanbul, Turkey May 21, 2018. REUTERS/Yoruk Isik/File Photo

The company said it may make “targeted investments” in the engineering and construction sector to maintain its leadership, while at the same time considering “strategic options” for its drilling business.

FILE PHOTO: The Saipem 10000 deepwater drillship is pictured in the Genoa's harbour, Italy, November 19, 2015. REUTERS/Alessandro Garofalo/File Photo

The shift in strategy came as the company reported a net loss of 321 million euros (£284.72 million) in the second quarter after booking costs of 316 million euros relating to writedowns, reorganisation costs and a tax settlement of 202 million euros.

Saipem, controlled by oil major Eni (ENI.MI) and state lender CDP, is looking to develop new lines of business to boost order books as the sector struggles to recover from years of falling margins.

The recent uptick in oil prices has not yet prompted oil service company clients to speed up investments despite a few signs of recovery in some areas.

The company said in the first six months of the year its order intake almost doubled on the year to 4 billion euros.

“We expect commercial activity to maintain this trend in the second half of the year too,” CEO Stefano Cao said.

Reporting by Stephen Jewkes, editing by Louise Heavens

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