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Interim Consolidated Report As of June 30, 2012 001-058Saipemsem12ing.Qxd 2-08-2012 14:13 Pagina II 001-058SaipemSem12Ing.qxd 2-08-2012 14:13 Pagina I Interim Consolidated Report as of June 30, 2012 001-058SaipemSem12Ing.qxd 2-08-2012 14:13 Pagina II Mission Pursuing the satisfaction of our clients in the energy industry, we tackle each challenge with safe, reliable and innovative solutions. Our skilled and multi-local teams create sustainable growth for our company and the communities in which we operate Our core values Commitment to safety, integrity, openness, flexibility, integration, innovation, quality, competitiveness, teamwork, humility, internationalisation By their nature, forward-looking statements are subject to risk and uncertainty since they are dependent upon circumstances which should or are considered likely to occur in the future and are outside of the Company’s control. These include, but are not limited to: monetary exchange and interest rate fluctuations, commodity price volatility, credit and liquidity risks, HSE risks, the levels of capital expenditure in the oil and gas industry and other sectors, political instability in areas where the Group operates, actions by competitors, success of commercial transactions, risks associated with the execution of projects (including ongoing investment projects), in addition to changes in stakeholders’ expectations and other changes affecting business conditions. Actual results could therefore differ materially from the forward-looking statements. The operating and financial review and the notes to the interim financial statements contain in-depth analyses of some of the aforementioned risks. Forward-looking statements are to be considered in the context of the date of their release. Saipem SpA is under no obligation to review, update or correct them subsequently, except where this is a mandatory requirement of the applicable legislation. The forward-looking statements given herein are not intended to provide legal, accounting, tax or investment advice and should not be relied upon in that regard. Nor are they intended to constitute an invitation to invest. Countries in which Saipem operates EUROPE Austria, Belgium, Croatia, Cyprus, Denmark, Finland, France, Germany, Greece, Italy, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Spain, Sweden, Switzerland, Turkey, United Kingdom AMERICAS Bolivia, Brazil, Canada, Colombia, Dominican Republic, Ecuador, Mexico, Peru, Suriname, Trinidad and Tobago, United States, Venezuela CIS Azerbaijan, Kazakhstan, Russia, Turkmenistan, Ukraine AFRICA Algeria, Angola, Cameroon, Congo, Egypt, Gabon, Ivory Coast, Libya, Mauritania, Morocco, Mozambique, Nigeria, South Africa, Tunisia MIDDLE EAST Iraq, Kuwait, Oman, Qatar, Saudi Arabia, Syria, United Arab Emirates, Yemen FAR EAST AND OCEANIA Australia, China, East Timor, India, Indonesia, Japan, Malaysia, Myanmar, Pakistan, Papua New Guinea, Singapore, South Korea, Taiwan, Thailand, Vietnam Board of Directors and auditors of Saipem SpA BOARD OF DIRECTORS BOARD OF STATUTORY AUDITORS Chairman Chairman Alberto Meomartini Mario Busso Deputy Chairman and Chief Executive Officer Pietro Franco Tali Statutory Auditors Managing Director for Business Support and Transversal Activities Anna Gervasoni1 (Deputy CEO) Adriano Propersi Hugh James O’Donnell Directors Alternate Statutory Auditors Gabriele Galateri di Genola, Nicola Greco, Maurizio Montagnese, Giulio Gamba2 Mauro Sacchetto, Umberto Vergine, Michele Volpi Paolo Sfameni (1) Appointed Statutory Auditor by the Shareholders’ Meeting of April 27, 2012. (2) As the Alternate Statutory Auditor, took over as Statutory Auditor from Fabrizio Gardi on December 6, 2011 and confirmed again as Alternate Statutory Auditor by the Shareholders’ Meeting of April 27, 2012. Independent Auditors Reconta Ernst & Young SpA Saipem is a subsidiary of Eni SpA 001-058SaipemSem12Ing.qxd 2-08-2012 14:13 Pagina 1 Interim Consolidated Report as of June 30, 2012 Condensed consolidated interim financial statements Financial statements 60 Interim results 2 Notes to the condensed consolidated interim 66 Saipem Group structure 3 financial statements Operating and Financial Review Management’s certification 107 Saipem SpA share performance 8 Independent Auditors’ Review Report 108 Glossary 10 Operating review 13 New contracts and backlog 13 Capital expenditure 15 Offshore Engineering & Construction 16 Onshore Engineering & Construction 21 Offshore Drilling 25 Onshore Drilling 28 Financial and economic results 30 Results of operations 30 Balance sheet and financial position 33 Reclassified cash flow statement 35 Key profit and financial indicators 36 Sustainability 37 Research and development 39 Quality, Health, Safety and Environment 41 Human resources 43 Information technology 46 Risk management 47 Additional information 54 Reconciliation of reclassified balance sheet, 56 income statement and cash flow statement to statutory schemes Approved by the Board of Directors on July 30, 2012 001-058SaipemSem12Ing.qxd 2-08-2012 14:13 Pagina 2 Saipem Interim Consolidated Report as of June 30, 2012 / Operating Review Interim results Revenues amounted to €6,397 million (€6,021 million in the same period of 2011). Operating profit totalled €762 million (€711 million in the same period of 2011). Net profit was €473 million (€438 million in the same period of 2011). Cash flow (net profit plus depreciation and amortisation) reached €818 million (€740 million in the same period of 2011). The Offshore Engineering & Construction sector accounted for 39% of revenues and 43% of overall operating profits, the Onshore Engineering & Construction sector contributed 47% of revenues and 32% of overall operating profits, the Offshore Drilling sector 8% of revenues and 18% of overall operating profits and the Onshore Drilling sector generated 6% of revenues and 7% of overall operating profits. Net financial debt at June 30, 2012 amounted to €3,935 million, an increase of €743 million from December 31, 2011. This is ascribed to a deterioration in working capital during the first quarter of 2012, the distribution of dividends during the second quarter and the renewal of exchange rate hedging transactions against a stronger US Dollar. The recovery from the unusual working capital exposure of Q1 started in Q2 and is expected to continue in the second half of the year. Capital expenditure in the first half of 2012 amounted to €548 million (€561 million in the first half of 2011). With regard to the principal assets under construction, the construction of the semi-submersible drilling rig, Scarabeo 8, was completed during the period, while the construction of the new pipelay vessel, Castorone, continued. The Group was awarded new contracts worth €6,303 million during the first six months of the year, while the order backlog at June 30, 2012 amounted to €20,323 million. 2 001-058SaipemSem12Ing.qxd 2-08-2012 14:13 Pagina 3 Saipem Interim Consolidated Report as of June 30, 2012 / Saipem Group structure Saipem Group structure (subsidiaries) 3 001-058SaipemSem12Ing.qxd 2-08-2012 14:13 Pagina 4 Saipem SpA 100.00% 99.00% 100.00% 100.00% 1.00% Saipem Andromeda Snamprogetti Saipem International Consultoria Tecnica e Netherlands BV Offshore BV Representações Ltda Norway AS 100.00% 60.00% Sigurd Rück AG Sajer Iraq Llc 100.00% 100.00% 99.00% 100.00% Varisal - Serviços de Snamprogetti Consultadoria e Marketing Saipem Snamprogetti 100.00% Asia Sdn Bhd Romania Srl Ltd Saipem (Portugal) Unipessoal Lda Comércio Maritimo 31.45% 1.00% Sociedade Unipessoal Lda 100.00% 68.55% 99.00% Snamprogetti Sonsub AS PT Saipem Lummus Indonesia Gas Ltd Saipem 100.00% 95.00% Snamprogetti 5.00% Mediteran Saudi Arabia Usluge doo Co Ltd Llc 60.00% 60.00% 40.00% Saudi Arabian Saipem Libya Limited Liability Company Saipem Ltd SA.LI.CO. Llc 100.00% 99.00% 1.00% ERS Equipment Saipem Rental & Services Ukraine Llc BV 0.02% 99.98% 100.00% Saipem Sonsub Services sa International Pty Ltd 0.04% Saipem Misr for 99.92% 41.94% Saipem Petroleum (Malaysia) 0.04% Services (S.A.E.) Sdn Bhd Saipem 97.94% 50.00% Contracting Ersai Caspian (Nigeria) Ltd Contractor Llc 100.00% 100.00% 100.00% Global Snamprogetti Construction Petroprojects Canada Inc Saipem Services AG Canada Inc 89.41% 100.00% Saipem North Caspian (Nigeria) Ltd Service Co Llp 100.00% 100.00% 100.00% Moss Moss Saipem UK Ltd Maritime AS Maritime Inc 100.00% 100.00% Saipem Petrex SA Norge AS 100.00% Saipem Drilling Norway AS 100.00% 100.00% . Saipem Saipem America Inc Australia Pty Ltd 100.00% 100.00% Saipem (Beijing) Technical Saipem Ltd Services Co Ltd 100.00% 100.00% 100.00% Saipem Saipem do Brasil Terminal. Contracting Serviçõs de Portuário de Netherlands BV Petroleo Ltda Guarujá SA 001-058SaipemSem12Ing.qxd 2-08-2012 14:13 Pagina 5 0% 100.00% 99.90% 100.00% 100.00% Saipem Maritime Snamprogetti Servizi Energia Asset Management Chiyoda sas Saipem sa Italia SpA Luxembourg Sarl di Saipem SpA 100.00% Snamprogetti Engineering BV 100.00% 99.99% 100.00% 100.00% Saipem Saipem Boscongo sa Medsai Sas Luxembourg SA Singapore Pte Ltd 100.00% 100.00% 100.00% Saipem Saimexicana Sofresid sa India Project Ltd SA de Cv 100.00% 99.99% Saipem Sofresid Services México Engineering sa SA de Cv 100.00% 100.00% Saipem Saigut SA de Cv Contracting Algérie SpA 49.73% 50.27% Saipem Drilling Co Pvt Ltd The chart only shows Saipem subsidiaries 001-058SaipemSem12Ing.qxd 2-08-2012 14:13 Pagina 6 001-058SaipemSem12Ing.qxd 2-08-2012 14:13 Pagina 7 saipem Operating and Financial Review 001-058SaipemSem12Ing.qxd 2-08-2012 14:13 Pagina 8 Saipem Interim Consolidated Report as of June 30, 2012 / Saipem SpA share performance Saipem SpA share performance During the first half of 2012, the value of Saipem ordinary shares sharply and had an adverse impact on the performance of the on the Milan Stock Exchange registered an increase of 6.9%, markets in the second quarter of 2012. reaching a price of €34.99 at June 30, 2012, versus €32.73 at The Saipem share was not escape from this negative trend, year end 2011. In the same period, the FTSE MIB index, which beginning a fall which took it below the €30 threshold to €29.98 records the performance of the 40 most liquid and capitalized at the beginning of June, before closing the half year at €34.99.
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