Moody’s changes Saipem view to negative

Moody’s Investors Service said it changed the outlook on Saipem SpA to negative from stable. Concurrently, Moody’s affirmed all Saipem’s ratings as well as all the ratings of its subsidiary Saipem Finance International BV.

The change of the outlook to negative has been driven by a significant deterioration of operating environment in the oil and gas industry, which Moody’s believes will have a negative effect on Saipem’s performance in the next 12-18 months, the agency said.

“Since the beginning of March 2020 oil prices have plummeted, hitting earnings and cash flows of oil and gas producers worldwide. The agency also expects that the prices will not recover back within its fundamental medium-term oil price range of $50-$70/barrel at least until 2022, as the coronavirus pandemics meaningfully reduces global GDP growth and the demand for oil,” said Moody’s in a press release.

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