In a recent analysis note dated Monday, Stifel analysts have elevated their recommendation for Saipem SpA (BIT:SPMI) from a ‘hold’ to a ‘buy’. This adjustment is based on the company’s compelling risk-return profile, impressive first-quarter financial performance, and appealing dividend prospects.
During the first quarter of 2025, Saipem experienced a 15% increase in revenues compared to the previous year, reaching €3.52 billion. Additionally, their adjusted EBITDA saw a significant rise of 34%, totaling €351 million. This growth was largely driven by advancements within the Offshore and Onshore Engineering & Construction segments.
The Onshore E&C segment notably achieved a positive EBITDA margin of 1.3%, reflecting improved operational efficiencies. Meanwhile, offshore drilling revenues remained consistent with the figures from last year, showcasing stability in that sector.
Highlighting its robust liquidity position, Saipem reported a net cash balance of approximately EUR 970 million prior to the application of IFRS16. Furthermore, the company’s order book boasted a total of €32.67 billion by the end of the first quarter. This substantial backlog ensures visibility for future revenues and exceeds 2.2 times the anticipated revenues for 2025.
Saipem continues to uphold its guidance for 2025, targeting revenues of €15 billion, an EBITDA of €1.6 billion, and an operating cash flow of €900 million after accounting for lease obligations.
While challenges persist with legacy projects, specifically the Courseulles offshore wind project and Thai Oil, Saipem has proactively addressed these risks through strategic provisions.
Stifel analysts assert that Saipem’s operational refinements and strategic initiatives position the company favorably for prospective growth, especially within the offshore sector. This optimistic outlook, coupled with Saipem’s strategic repositioning and solid financial foundation, presents an enticing investment opportunity.
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