SLB - Subsea 7: Margin Improvement Comes And Will Likely Continue
2023-05-23 22:42:59 ET
Summary
- We predicted margin improvement as a new bulge of projects neared completion where margins tend to grow at the tail-end of projects.
- That is happening, even in a slower seasonal Q1, where FY margins should grow even further as inflation abates.
- Moreover, the backlog continues to grow, and the renewables projects are becoming a more robust sink for bids.
- The company remains cheap in multiple, but as always, if activity dries up, the effects are fierce on the company balances. Thankfully, that is not a current concern.
- They also got a good deal on the J.V. they are entering into with Schlumberger and Aker Solutions thanks to a substantial delay they can exercise in making the second tranche payment for their stake.
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Subsea 7: Margin Improvement Comes And Will Likely Continue