Offshore installation and construction company Subsea 7 has withdrawn its 2020 guidance and outlook statements given late in February, citing the impact of the coronavirus and the oil price crash.
Subsea 7 had in February said that it expected increasing tendering activity for offshore work, and that revenue and adjusted EBITDA were expected to be higher than in 2019, driven by an increase in activity in key markets. The company has now withdrawn its guidance "due to the general uncertainty in the world and for our industry caused by the coronavirus and the collapse in commodity prices"
"The Company's first priority is to protect the health and safety of its 12,000 employees, while it continues to deliver projects to its clients," Subsea 7 said Wednesday.
"While the current year's results are underpinned by a backlog at year-end 2019 of $5.2 billion, including $3.3 billion for execution in 2020, the dual impacts of the coronavirus and sharply lower commodity prices represent a significant headwind to the pace of the new awards required to meet prior guidance.
"In addition, it is possible that measures taken around the world to contain the virus may impact the company's ability to execute existing contracts and recognize revenue in 2020."
"The company has significant liquidity available to weather these challenges, with $398 million cash and equivalents, as well as undrawn banking facilities of $656 million."
Subsea 7 said it would update investors with its first-quarter 2020 results and an updated market view on April 30, 2020.