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21 Oct 2024
Q3 previews: Recovery despite the oil beta blow
Saipem (SPM:BIT), 0 | Saipem S.p.A. (SPM:MIL), 0 | Vallourec (VK:EPA), 0 | Vallourec SA (VK:PAR), 0 | Viridien (VIRI:PAR), 0 | SBM Offshore NV (SBMO:AMS), 0 | TechnipFMC PLC (FTI:NYSE), 0 | TechnipFMC plc (FTI:NYS), 0 | SUBSEA 7 (SUBC:STO), 0 | Subsea 7 S.A. (SUBC:OSL), 0 | Gaztransport & Technigaz (GTT:EPA), 0 | Gaztransport & Technigaz SA (GTT:PAR), 0 | AKER SOLUTIONS (AKSO:STO), 0 | Aker Solutions ASA (AKSO:OSL), 0 | Technip Energies NV (TE:PAR), 0

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Q3 previews: Recovery despite the oil beta blow
Saipem (SPM:BIT), 0 | Saipem S.p.A. (SPM:MIL), 0 | Vallourec (VK:EPA), 0 | Vallourec SA (VK:PAR), 0 | Viridien (VIRI:PAR), 0 | SBM Offshore NV (SBMO:AMS), 0 | TechnipFMC PLC (FTI:NYSE), 0 | TechnipFMC plc (FTI:NYS), 0 | SUBSEA 7 (SUBC:STO), 0 | Subsea 7 S.A. (SUBC:OSL), 0 | Gaztransport & Technigaz (GTT:EPA), 0 | Gaztransport & Technigaz SA (GTT:PAR), 0 | AKER SOLUTIONS (AKSO:STO), 0 | Aker Solutions ASA (AKSO:OSL), 0 | Technip Energies NV (TE:PAR), 0
- Published:
21 Oct 2024 -
Author:
Thomson Daniel DT -
Pages:
30 -
Previewing Euro Oil Services Q3s - a brighter picture than recent performance suggests
We preview Euro OFS Q3s in this note. With Brent crude prices down c10% in the last 3 months and falling below $70/bbl briefly, the sector is down 12% in absolute terms, underperforming both EU Energy and the broader market by 7% and 14% respectively. This despite exposure to typically longer cycle OandG capex, healthy backlogs and continued recovery in earnings as we wrote about recently in Something''s Gotta Give.
Saipem (+): Record offshore order intake masks a slower quarter for others
Saipem''s $7bn+ of offshore order intake in Saudi Arabia and Qatar is the highest in the division''s history, driving group book-to-bill 2.0x with 40% of ABS targeted order intake over 2024-27 achieved in 9M24. With SPM''s 2-year ban from contracting with Petrobras annulled in the Brazilian courts this month, subject to an ''administrative counter-appeal phase'', several high value SURF opportunities may soon be added to its EUR53bn tendering pipeline. Following record order intake in 2Q, Subsea 7 (=) had a more subdued quarter for awards though we''d expect the company to be well-positioned for at least one ''super-major'' order prospect in 4Q24, namely Buzios-10 in Brazil.
It''s an important quarter for TechnipFMC (=), Vallourec (+) and Aker Solutions (=)
TechnipFMC will update 2025 guidance in its Subsea division this week, with consensus factoring in EBITDA growth of 23% y/y and 18.7% margin (vs 18% originally guided). We think Aker Solutions could raise revenue guidance for a 3rd consecutive quarter, while Vallourec (a top pick) may opt to re-initiate returns to shareholders for the first time since 2015 through share or warrant buybacks.
Key themes for 3Q24 calls: customer capex, competition and pricing upside, de-risking orders
With the IEA''s oil market balances suggesting oversupplied markets next year even before the return of curtailed OPEC+ barrels, we''d look for any signs of...