Saipem SpA, a listed company in Milan Exchange, has announced its financial results on 26 February, highlighting strong revenue and net profit for 4Q24 and 2024. However, there are some questions being raised at the press conference about its provisions, especially for Thai Oil’s project.
The company is also providing engineering, procurement and construction (EPC) services for Thai Oil Public Company Limited (SET: TOP) on the Clean Fuel Project under a joint venture with Samsung E&A (Thailand) Co., Ltd. and Petrofac South East Asia Pte. Ltd., collectively called UJV.
UJV stopped paying subcontractors, leading to work stoppages and project delays. This led to Thai Oil exercising a bond call, enforcing security from the EPC contract for THB 12,339 million.
According to the transcription from LSEG, Saipem’s CEO said that the company has already accounted for additional provisions related to the Thai Oil project. The company is now waiting for Thai Oil’s response regarding recognition of extra costs and time needed after Thai Oil’s shareholders approved a budget increase and an extension for project completion.
However, the company is still uncertain on whether Thai Oil will continue with the same contractor (UJV) or terminate the contract. The company has already accounted for all expected costs, including over €100 million in security bonds and overall project costs.
