Saipem’s profit surges 70% in 2024: What investors need to know

Italian oilfield services contractor Saipem has reported its preliminary financial results for 2024, showcasing a third consecutive year of growth and improved profitability. The company’s revenue surged by 23% year-on-year to reach €14.5 billion, while adjusted EBITDA climbed 44% to €1.3 billion. Net income saw a significant increase of 70%, rising to €306 million. These results reflect Saipem’s ability to execute projects efficiently and capitalize on market demand, solidifying its position as a leader in the global energy sector.

The company’s performance was further strengthened by a record-breaking order intake of €18.8 billion, which propelled its backlog to an all-time high of €34 billion. This robust pipeline of contracts ensures strong revenue visibility and underpins Saipem’s newly updated 2025-2028 Strategic Plan. The plan focuses on debt reduction, an enhanced shareholder remuneration policy, and an expansion of Project Management Consultancy services, positioning the company for sustainable long-term growth.

How Did Saipem Perform Financially in 2024?

Saipem’s 2024 financial results underscore a period of strong operational and financial performance. In the fourth quarter alone, the company generated €4.4 billion in revenue, marking a 26% increase compared to the same quarter in 2023. Adjusted EBITDA for the quarter also showed significant improvement, rising 48% year-on-year to €424 million.

The company’s financial position continued to strengthen, with its pre-IFRS 16 net financial position reaching €683 million, compared to €216 million at the end of 2023. This improvement was driven by increased cash flow generation, disciplined capital management, and the successful execution of high-margin projects. Saipem’s offshore and onshore business segments played a crucial role in delivering these results, with strong contract execution and a steady demand for energy infrastructure services contributing to the company’s growth.

What Are Saipem’s Strategic Goals for 2025-2028?

Saipem’s 2025-2028 Strategic Plan aims to enhance financial stability, optimize business operations, and expand its market presence. One of the key objectives is to reinforce shareholder value while working toward achieving an investment-grade credit rating. The plan prioritizes business de-risking by transitioning the Onshore Engineering & Construction division to a value-over-volume approach, focusing on risk mitigation and higher-margin projects. Additionally, the company is introducing Project Management Consultancy services to provide expert oversight on complex infrastructure developments.

A crucial element of the strategy is debt reduction, with Saipem committing to repaying all maturities due between 2025-2027, lowering gross debt by approximately €650 million. The upgraded shareholder remuneration policy is set to distribute at least 40% of free cash flow post-lease liabilities, with a proposed €333 million dividend for 2025 based on 2024 results. These measures reflect Saipem’s dedication to strengthening its financial health while maintaining competitive shareholder returns.

How Will Saipem Sustain Growth Amid Market Challenges?

Saipem’s record order intake of €18.8 billion in 2024 demonstrates the company’s strong market position and ability to secure long-term, high-value contracts. The company has raised its financial guidance for 2025, forecasting revenue of approximately €15 billion, EBITDA of around €1.6 billion, and free cash flow of at least €500 million after lease liability repayments.

By 2028, Saipem expects to generate an order intake of €50 billion, with at least 30% of new contracts focused on low-carbon and renewable energy projects. The company is actively aligning its business strategy with the global energy transition, investing in carbon capture and storage, offshore wind, biofuels, and sustainable LNG solutions. This strategic shift ensures that Saipem remains competitive as the industry moves toward decarbonization and cleaner energy alternatives.

What Does Saipem’s Record Backlog Mean for Future Performance?

The €34 billion backlog provides Saipem with significant revenue visibility and long-term financial stability. This extensive contract portfolio allows the company to maintain a steady project pipeline, mitigating risks associated with market fluctuations and oil price volatility. The backlog reflects Saipem’s success in expanding its global presence, particularly in key regions such as the Middle East, Sub-Saharan Africa, Europe, and the Asia-Pacific region.

Major contract wins in 2024 included projects with TotalEnergies, BP, and Shell. Saipem secured a major subsea development project in Suriname for TotalEnergies, involving the installation of 100 kilometers of subsea production flowlines and 90 kilometers of injection lines. The company also won an EPCI contract with BP for the Tangguh UCC Project in Indonesia, which includes the development of two wellhead platforms and a CO2 reinjection facility. Additionally, Saipem will execute a deepwater development project with Shell for the Bonga North Project off the coast of Nigeria. These contracts reinforce Saipem’s leadership in offshore engineering, procurement, and construction services, ensuring a strong competitive edge in the global energy market.

How Does Saipem’s Sustainability Plan Align with Industry Trends?

Saipem has approved a 2025-2028 Sustainability Plan that integrates environmental, social, and governance (ESG) principles into its core business strategy. The plan focuses on three key areas: reducing the company’s carbon footprint, prioritizing worker safety, and creating value in local communities. By aligning its operations with global sustainability goals, Saipem aims to enhance its reputation as a responsible and forward-thinking industry leader.

The company is investing heavily in low-carbon technologies, with a particular focus on carbon capture, hydrogen production, and electrification of industrial processes. It is also expanding its renewable energy portfolio, leveraging its expertise in offshore wind, biofuels, and geothermal energy. These initiatives position Saipem as a key player in the transition toward cleaner and more sustainable energy solutions.

Financial discipline remains a cornerstone of Saipem’s sustainability approach, with a commitment to maintaining at least €1 billion in available cash reserves. The company is also strengthening its corporate governance framework to ensure transparency, operational efficiency, and risk management. By embedding sustainability into its strategic plan, Saipem is proactively addressing regulatory challenges and investor expectations, ensuring long-term resilience in a rapidly evolving industry.

What Are the Key Takeaways for Investors?

Saipem’s financial performance in 2024 underscores its ability to generate strong revenue growth, improve profitability, and maintain a healthy balance sheet. The company’s debt reduction plan and upgraded shareholder returns policy highlight its commitment to financial stability and long-term value creation. With a clear focus on sustainability, technological innovation, and market expansion, Saipem is well-positioned to navigate future industry challenges while capitalizing on new growth opportunities.

Investors will closely monitor the execution of Saipem’s 2025-2028 strategy, particularly its ability to maintain profitability while expanding into low-carbon energy markets. The company’s disciplined financial management, robust backlog, and strategic diversification provide a strong foundation for future success. As Saipem continues to enhance its operational efficiency and global reach, its performance in the coming years will be a key indicator of its ability to deliver sustained growth and shareholder value.

Saipem’s 2024 results confirm its resilience and strategic agility in a dynamic energy landscape. With a record €34 billion backlog, ambitious financial targets, and a commitment to sustainability, the company is poised for continued success. Its focus on financial discipline, operational excellence, and innovation ensures that it remains at the forefront of the global energy sector. As Saipem advances its 2025-2028 strategic plan, its ability to balance profitability with sustainable growth will be a crucial factor in its long-term performance.