Italian energy firm, Saipem has released its first half year results for 2020, with revenue of €4.5 billion, of which only €1.5billion was earned in the second quarter.
It however posted a net loss of 616 million euros (559.17 million pounds) in the second quarter following writedowns.
The company said the industry faced uncertain demand for oil and gas, as it painted a gloomy future ahead.
In April the group pulled its 2020 outlook, saying the pandemic might trigger a sharp fall in demand and a delay in projects.
On Wednesday it said its order backlog would allow it to maintain volumes similar to the first half, while efficiency measures and lower investments would keep its adjusted core earnings margin close to 10%.
“This outlook does not factor further and possible tangible business deterioration associated with the intensification of COVID-19,” it said.
Lockdowns imposed around the world to slow the spread of the coronavirus throttled demand for oil and gas, prompting oil majors to slash investments and defer projects to conserve cash.
Saipem, a market leader in subsea engineering and construction, said its core earnings in the second quarter were 31 million euros, down from 308 million euros a year earlier.
New contracts in the first half of the year totaled 4.837 billion euros compared to 9.537 billion euros in the first half of 2019.
Saipem, controlled by state lender CDP and oil major Eni (ENI.MI), has been looking to develop new lines of business to boost order books, including renewable energy projects.
In the first half, it incurred capital expenditure of €195 million and net debt was estimated at
2020 business outlook
“The market scenario remains characterised by strong uncertainty about the economic and financial prospects, because of the Covid-19 pandemic still spreading worldwide, and because of the uncertainty for the demand for oil and gas and related services<" Saipem said. Stefano Cao, chief executive officer, commented on the result: “The strengthening of the financial position and assets achieved in recent years, the timely orientation of the business towards energy transition, the size and diversification of the backlog and the suitability of the assets ensure a clear market position to Saipem. "In addition, they guarantee a solid base to the strategies adopted to face the consequences of the pandemic and further future challenges and seize new opportunities to play a leading role in the recovery phase post Covid -19. "Despite the general economic context, heavily penalised by the prolonged health emergency, the execution activities of our projects around the world have progressed, within the limits posed on mobility and taking into account the reschedule of certain activities and the priority to safeguard the health of people. "The backlog - considerably grown even during this difficult period - is solid and the liquidity is substantial, further strengthened by the new bond issue announced at the beginning of July.”