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Subsea 7 revises financial guidance on offshore wind woes

© Supplied by Subsea 7Subsea 7 revises financial guidance on offshore wind woes

Subsea 7 (OSLO: SUBC) has revised its full year financial guidance on issues with its renewables division.

In an update, the energy services giant said Seaway 7 has announced provisions against the delivery of offshore wind projects due to increased costs, spurred by weather delays and mechanical faults.

Combined with existing problems at the Formosa 2 scheme, off Taiwan, Subsea 7 is forecasting an impact on its adjusted earnings before interest, tax, depreciation and amortisation (ebitda).

A specific figure was not given, but it is expected to be “broadly in line” with 2021.

Subsea 7 said: “Subsea 7 today updated its Adjusted EBITDA guidance for the full year 2022.

“Seaway 7 announced today provisions against the results of project execution of offshore windfarm installations due to increased costs relating to weather delays and mechanical breakdowns.

“This, together with an increase in the existing provision on the Formosa 2 project2, including the effects of Covid-19, will impact Subsea 7’s Adjusted EBITDA for 2022, which is still expected to be broadly in line with 2021.”

It was recently announced that Subsea 7 had bagged a “very large” contract for work on the Seagreen 1A offshore wind project, off the coast of Angus.

Seaway 7 has been picked as a preferred, meaning it will be responsible for providing the full engineering, fabrication, transport and installation of the scheme’s 36 foundations.

It may also be responsible for transporting and installing the offshore substation, and the procurement and installation of inner-array cables.

Execution of the project – due to get underway in 2023, with offshore work commencing in late 2024 – will be led from Seaway 7’s Aberdeen office.

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