Saipem positive in Piazza Affari (+1.8%). But the red on 2022 is 50%, that’s why
Saipem get back on track. After the splash in Bag yesterday, Monday 13 February, when the company’s stock lost more than 5%, the energy company he closed the day with a serene +2.23%.
Driven by Stefano Cao e Francesco Caio, Saipem it is undoubtedly the phenomenon of the year that has just begun. In 2023, in just 44 days (the day this article is being written), the stock of the San Donato Milanese company gained around 35%.
Compared to last year, however, the quotation is still about 50% lower. But analysts still see room for growth for the title, possibly supported by the recovery of the investments in the search for new deposits.
Jp Morgan sets the target at 1.95 euros. But that’s not the only promotion. Websim it has an interesting fundamental recommendation and a target price of 1.80 euros, up from 1.4 euros. Also Bank of America indicates the finish line at 1.8 euros. Citibank it goes up to €2 while waiting for the 2022 bills. They will be published on February 28 but already in November Saipem has raised its targets.
The reasons for the collapse
But, as Verità&Affari reports, it is precisely by following the paths traced by the analysts that it is possible to reconstruct the company’s recovery path. Starting from the profit warning launched exactly one year ago by Francesco CaioCEO since May 2021 at the time.
The cause of the emergency call had been unfavorable events on old contracts whose effects, according to international accounting rules, had to be declared immediately. To cover the hole, a capital increase from a good two billion that the market had struggled to digest.
The banks of the consortium had guaranteed it for 600 million after very close negotiations. And, as you might think, there was no shortage of stomach aches in the rescue group. So strong, among other things, as to push immediately to liquidate shares that they had had to subscribe. It had actually been a fire sale considering they had paid just over a euro per share and sold at decreasing prices. The minimum at 0.57 euro was reached on 21 September.
Had they had the patience to wait a few months they would have obtained much greater satisfaction. Especially since in the first half of last year – after the profit warning – the group had already reached the halfway point. Francesco Caio had presented a half-yearly with I got in growth by 40% and an operating margin of 321 million against a loss of 2.66 billion in 2021.
With this result, the group closed ten years of disasters that began in 2013 – well before Caio – with the first of three profit warning followed, between 2015 and 2020, by total losses of almost five billion.
The hole had been closed with the capital increases of 2016 and 2022 for a total of 4.5 billion. Several elements have caused this disaster: from the judicial troubles in Algeria to the unfortunate decision to diversify the activity in the wind energy field.
But a critical point was reached in 2019 with two orders worth 750 million (acquired before Caio was appointed) in wind power in Scotland. Being works of less than one billion, they do not pass to the examination of the board of directors.
The delegations belong to the heads of the divisions concerned who will leave their office at the end of 2021. The two shop assistants cause a loss of more than one billion as they are fixed price contracts and all risks are borne by Saipem. Faced with these critical issues Caio initiates an audit of the accounts which reveals costs that are double the estimated ones.
Hence the profit warning of January 2022 which negatively surprises the market. In November, presenting the accounts for the nine months, Caio he had expressed great confidence in the evolution of the business for the rest of the year on the basis of the data provided to him by the Divisions.
The return to the ancient vocation
The alarm on the accounts and the call of the capital increase, therefore they undermine relations with the market. Above all they overshadow the renovation work initiated by Caio. With the Industrial plan which it had presented in October 21 and reconfirmed in its strategic priorities in April 2022, Saipem in fact, it returned to its ancient vocation which consists in exploration at sea where it represents a world excellence.
The onshore drilling activities and is set in a completely new way diversification into wind power. The 2022 half-year report presented by Caio to the financial community it is the signal of the trend reversal. A new one opens up, with consistent growth, with the indications of the Strategic Plan and which the market is appreciating. The general director Alessandro Puliti assumes the position of managing director.
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