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Saipem confirms targets after return to core profit

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·2-min read
FILE PHOTO: A Saipem logo in seen on the bridge of the Saipem 10000 deepwater drillship in Genoa's harbour
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By Francesca Landini

MILAN (Reuters) - Italy's Saipem on Wednesday confirmed its 2022 guidance and the targets in its business plan after the energy services group reported a first-half adjusted core profit of 321 million euros ($325 million).

Investors this month agreed to fund only 1.4 billion euros of a life-saving 2 billion euro cash call, leaving the underwriting banks to mop up the remaining new shares.

However, CEO Francesco Caio sounded a more upbeat note after a hefty profit warning earlier this year and said the company would stick to its objectives for 2022-25.

"On the basis of these results, we look forward with confidence to the objectives for the year and for the plan," Caio said in a statement.

A year earlier the group, controlled by energy group Eni and state lender CDP, had posted a first half loss of 266 million euros in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA).

It aims to reduce its net debt to around 800 million euros by the end of the year, excluding expected proceeds from the sale of its Onshore Drilling business, down from 1.7 billion at the end of first half.

The group is thinking of spinning off vessels used to build offshore installations into a separate entity to raise cash and further cut debt, CFO Paolo Calcagnini told reporters.

The company also said it does not expect a major LNG project in Mozambique to restart this year after it was put on hold last year for safety reasons.

Saipem shares, which have lost more than 80% of their value this year, gained 2% by 1130 GMT.

First-half revenue jumped nearly 40% to 4.435 billion euros helped by a positive performance in offshore engineering & construction and drilling on the back of a global surge in demand for oil and gas infrastructure.

Saipem expects to record adjusted EBITDA of more than 500 million euros this year.

($1 = 0.9863 euros)

(Reporting by Francesca Landini, editing by Jason Neely and Keith Weir)

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