Saipem Lowers 2026 Earnings Forecast on Middle East Conflict Costs

Italian oil and gas services firm Saipem lowered its core earnings forecast for 2026 on Monday, citing mounting costs stemming from the ongoing conflict in the Middle East. The company also reported second-quarter earnings that fell short of analyst expectations.

Revised Outlook and Q2 Performance

Saipem now anticipates full-year adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to be €1.75 billion ($1.99 billion). This is a downward revision from its previous forecast of €1.9 billion, the company announced in a statement.

The adjustment follows a challenging second quarter, where adjusted EBITDA fell nearly 3% to €402 million. This figure missed the analyst consensus of €464 million compiled by LSEG, signaling to investors that operational headwinds are already impacting financial results.

Impact of Regional Conflict

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The Milan-based contractor, which serves major national oil companies like Saudi Aramco, QatarEnergy, and Abu Dhabi’s ADNOC, attributed the guidance cut to direct financial impacts from regional instability. Saipem spent approximately €70 million in the first half of the year on enhanced security for its personnel and to navigate logistical challenges.

Saipem noted that the new forecast includes these incurred expenses as well as an estimate for potential future costs in the second half. However, the company cautioned that the ability to pass these costs on to clients remains uncertain. "The recoverability of these extra costs cannot be precisely quantified at this stage, as it is subject to the outcome of commercial discussions with clients," Saipem said.

Other Factors

Beyond the geopolitical pressures, the revised earnings estimate also reflects the de-consolidation of Saipem's shallow-water drilling business, which was recently sold. Despite the reduction in its earnings forecast, the company maintained its full-year guidance for operating cash flow at a previously stated €1 billion.