Norway offshore contractor Subsea 7 posted an above-forecast 130 per cent jump in second-quarter pre-tax profit and painted a rosy outlook.

Profit before tax rose to $78 million in April-June, from $34 million a year earlier, beating an average forecast of $55 million in a Reuters survey of six analysts whose estimates had ranged from $44 million to $66 million.
With its business booming on the back of soaring oil prices, Subsea 7 said its worldwide order backlog jumped to $2.9 billion this month after a hefty order from Royal Dutch Shell.
Subsea 7, which supplies seabed production equipment to the petroleum industry, said its “outlook remains positive for the foreseeable future”, underlining its and the sector’s strength.
“It looks good – above consensus and my estimates from top to bottom, and the order backlog is also higher,” said analyst Arne Egil Roenning at Fondsfinans, which has a “buy” rating on Subsea 7’s shares.
“I need to raise my estimates for this year, and also (further) ahead,” he added.
Subsea 7 played up its project execution in the North Sea and off West Africa, where it completed the second phase of the Addax project, and high utilisation of vessels and equipment.
Chief executive Mel Fitzgerald said he expected to win further work in the region, adding that some $3 billion in total West African contracts should be up for grabs in 2007.
Several more African contract decisions, for smaller sums, are expected. “Hopefully we will do well,” Fitzgerald said.
Oil and gas prices have risen by roughly a third in the second-quarter from the same period of 2005, spurring petroleum activity and lifting the oilfield service industry broadly.