Results of operations

Saipem Group - Income statement

Year
2010
(€ milion) Year
2011
% Ch.
11,160 Operating revenues 12,593 12.8
14 Other revenues and income 21
(7,711) Purchases. services and other costs (8,729)
(1,627) Payroll and related costs (1,750)
1,836 Gross operating profit (EBITDAi) 2,135 16.3
(517) Depreciation. amortization and impairment (642)
1,319 Operating profit (EBITi) 1,493 13.2
(110) Net finance expense (133)
13 Net income from investments 19
1,222 Adjusted profit before income taxes 1,379 12.8
(344) Income taxes (392)
878 Adjusted profit before minority interest 987 12.4
(50) Net profit attributable to minority interest (66)
828 Adjusted net profiti 921 11.2
17 Gains on disposals -
(1) Taxation -
844 Net profit 921 9.1

 

Net sales from operations for 2011 amounted to €12,593 million, up 12.8% compared to 2010, due to greater volumes generated in all sectors of activity.
Gross operating profit (EBITDA) amounted to €2,135 million, a 16.3% increase versus 2010, reflecting a very good operating performance.
Depreciation and amortization of tangible and intangible assets amounted to €642 million, representing a significant increase (24.2%) compared with the previous year, mainly due to new rigs entering into service, particularly in the Offshore Drilling sector.
Operating profit (EBIT) for 2011 stood at €1,493 million, a €174 million (13.2%) increase over the previous year. This figure is analyzed in detail in the subsequent sections describing the performance of the various business units.
Net finance expense increased by €23 million compared with 2010, mainly due to a reduction in capitalized expenses and a slight increase in the cost of borrowing.
Net income from investments amounted to €19 million, an increase compared with 2010, as a result of the successful completion of a project by an associate company.
Adjusted profit before income taxes stood at €1,379 million, up 12.8% compared to 2010.
Income taxes amounted to €392 million, an increase of €48 million compared to 2010, due to an increase in taxable income and in the tax rate, which rose from 28.2% in 2010 to 28.4% in 2011.
Adjusted net profit totalled €921 million, an increase of 11.2% versus 2010.

Operating profit and costs by function
Year
2010
(€ milion) Year
2011
% Ch.
11,160 Operating revenues 12,593 11.8
(9,361) Production costs (10,608)
(131) Idle costs (134)
(143) Selling expenses (158)
(12) Research and development costs (12)
(10) Other operating income (expenses) (4)
(184) General and administrative expenses (184)
1,319 Operating profit (EBIT) 1,493 13.2

In 2011, the Saipem Group achieved net sales from operations of €12,593 million, an increase of €1,433 million compared to the previous year.
Production costs (which include direct costs of sales and depreciation of vessels and equipment) totalled €10,608 million (€9,361 million in 2010). This significant rise was in line with the increase in sales volumes.
Idle costs increased by €3 million. Selling expenses of €158 million registered an increase of €15 million compared to 2010, as a consequence of an increase in sales activities, in particular in the Offshore and Onshore E&C sectors.
Research and development costs of €12 million and general and administrative expenses of €184 million were in line with the previous year’s figures.
Operating profit (EBIT) increased by 13.2% compared to 2010.