Subsea 7 announced results for the fourth quarter and the full year which ended December 31, 2015. Q4 group revenue was $1 billion (2014: $1.4 billion) and adjusted EBITDA was $310 million, equating to a margin of 30%.
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The decrease in revenue was mainly due to lower activity levels in the Northern Hemisphere and Life of Field Business Unit and the Adjusted EBITDA reflected successful project execution and a strong cost discipline.
Net operating loss of $415 million included a goodwill impairment charge of $521 million and a $96 million impairment charge relating to vessels and equipment.
Excluding the goodwill impairment charge, net operating income of $106 million increased by $5 million compared to the fourth quarter 2014, despite the lower activity levels.
There was a strong contribution from projects nearing completion in the Southern Hemisphere and Global Projects Business Unit partly offset by net operating losses in the Northern Hemisphere and Life of Field, and Corporate Business Units.
Order intake of $0.5 billion in the quarter was partly offset by the adverse impact from foreign exchange movements in the quarter of approximately $50 million.
New awards announced in the quarter comprised a platform extension and tie-in project for Burullus Gas Company on the West Nile Delta project and an award for the development of the East Nile Delta Phase 3 project, both located offshore Egypt, as the Group built on its strong and growing presence in this important offshore region.
Full year results
Revenue for the full year 2015 of $4.8 billion (2014: $6.9 billion) reflected lower levels of activity resulting from the industry downturn.
Adjusted EBITDA was $1,217 million driven by consistently good project execution and strong cost discipline. Adjusted EBITDA percentage was 26%, five percentage points higher than the prior year in part due to significant progress on several large projects that reached the final stages of execution.
A downward revision of forecast activity levels resulted in an impairment charge of $521 million relating to goodwill and $136 million relating to vessels and equipment. This contributed to a reported net loss for the year of $37 million.
Excluding the $521 million goodwill impairment charge, net income was $484 million with both Business Units profitable in the year.
The group’s liquidity position remains strong with cash and cash equivalents of $947 million and net cash of $423 million as at 31 December. In addition, the Group had unutilised credit facilities totalling $857 million. Working capital discipline contributed towards $1.0 billion of cash generated from operating activities in the year. ■