Italian player envisages ‘new paradigm’ for onshore engineering and construction
Italian energy services contracting giant Saipem, which on Sunday confirmed it was in talks to merge with rival Subsea7, is targeting new orders of approximately €50 billion ($52.54 billion) over the next three years under its 2025-2028 strategic plan.
Over the 2025-2028 period, Saipem envisages that new contracts from the low or zero carbon sectors would account for around 30% of its total contract value.
The 2025-2028 Strategic Plan confirms the path of derisking of the business profile of the group, including an acceleration of the repositioning of the Onshore E&C (engineering and construction) business as well as the introduction of a new Project Management Consultancy (PMC) service, Saipem said on Tuesday.
The contractor this year alone expects revenues of approximately €15 billion, EBITDA of some €1.6 billion, and operating cash flow (after the repayment of lease liabilities) of approximately €900 million. Saipem has earmarked approximately €500 million for capital expenditure in 2025.
Saipem in 2024 was awarded new contracts totalling a record €18.812 billion versus €17.659 billion in the previous year, and the company’s order backlog as of 31 December stood at an all-time high of €34.065 billion – up more than €4 billion from end-2023.
The four pillars of Saipem’s 2025-2028 strategic plan are:
- Execution excellence, ensuring the delivery of projects on time and on budget, with HSE as a priority, with a constantly improved cutting-edge fleet, an execution-oriented tendering process and modularisation as a key to reduce execution risk.
- Capitalising on the upstream oil and gas upcycle by penetrating new promising markets and strengthening the group’s positioning in the countries where Saipem already has an established presence.
- A new paradigm for onshore E&C and PMC offering based on a value over volume approach, derisking of contractual schemes, operations and maintenance (O&M) as a source of recurring revenue and a growing share of PMC work.
- A broader offering in the energy transition, both onshore and offshore, with a focus on CCUS, green and blue Solutions, biofuels/SAF, LNG, offshore wind, nuclear and geothermal energy.
Saipem’s 2024 revenues stood at €14.5 billion, and adjusted EBITDA at €1.3 billion, corresponding to year-on-year growth of 23% and 44% respectively. Net income last year reached €306 million, increasing by 70% compared to 2023.
