First quarter profit halves at Saipem

Italian contractor Saipem has reported a 52% year-on-year drop in net profit for the first quarter of 2013 to €110 million.

Revenues stood at €3 billion – down 1.4% compared to the first three months of last year.

The results come amid an investigation by Italian prosecutors into alleged corruption offences in Algeria that Saipem chief executive Umberto Vergine warned could result in losses of up to €500 million in payments due from Algeria.

Saipem said the investigation was causing significant delays in the approval of Algerian projects, invoices and payments. It said the Supreme Court of Algiers had frozen the bank accounts of its Saipem Contracting Algerie subsidiary, which hold around €80 million.

Furthermore, Saipem warned that the investigation could possibly be extended by the Algerian Prosecutor, although it said it had no evidence regarding the status of the investigation or of the people involved. Saipem and its parent, Eni, have denied any wrongdoing.

Saipem’s backlog stood at €19.5 billion at the end of March this year, down from €19.7 billion at 31 March, 2012. Looking ahead, Saipem said that, despite an increase in short-term uncertainty across its activities, it remained confident in its prospects.

Saipem expects to achieve revenues of €13.5 billion for 2013 and net income of €450 million.