Seaway 7 Announce Trading Update After Weather, Mechanical Breakdowns and Construction Delays
Seaway 7 ASA (the “Company”) (Euronext Growth: SEAW7) announced today updates on its projects and updated Adjusted EBITDA guidance for full year 2022.
As a result, the Company has updated its guidance for full year 2022. Revenue is expected to be in line with previous guidance towards $1 billion with an Adjusted EBITDA margin now expected to be approximately 6%.
The Company has encountered reduced progress on the Hollandse Kust Zuid project relating primarily to adverse weather conditions and mechanical breakdowns. The cost increases associated with these challenges will result in a contract loss provision of approximately $30 million to be recognised in the second quarter 2022.
The installation of foundations for the Dogger Bank A and B project is expected to commence in 2022, as originally planned, although due to Seaway Alfa Lift’s delivery delay, Seaway Strashnov will now be deployed on the project for a full 2023 campaign. The increased cost of the extended Seaway Strashnov campaign will result in an increase in the contract loss provision of approximately $35 million. This loss will be reflected in a revision to the preliminary purchase price adjustment relating to the combination to form Seaway 7 ASA and will not affect Adjusted EBITDA. This revision will be recognised in the second quarter 2022.
The Company has also encountered reduced progress on the Formosa 2 project in Taiwan, related primarily to lower offshore productivity. Pursuant to an indemnity from Subsea 7 as part of the combination to form Seaway 7 ASA, the related costs will be reimbursed by Subsea 7 and will not affect Seaway 7.
As regards other operations, Seaway Ventus has commenced construction with the laying of the keel in early June 2022, in accordance with the planned delivery schedule, while Seaway Alfa Lift is now expected to join the fleet in the second half 2023.
The Seagreen project, which is significant to the Company’s portfolio, continues to perform well with 98 of the 114 jackets fabricated and 26 jackets installed. All jackets are scheduled to be installed during 2022, as originally planned, with S7000 Heavy Lift Vessel back in field delivering its scope.
Source Seaway 7