Oil industry services group Saipem’s shares sink after profit warning

Saipem’s share price fell by as much as 25% yesterday, after Europe’s biggest oil industry services group gave its second major profit warning in less than six months due to problems with contracts in Algeria, Mexico and Canada.

Saipem, 43% owned by Italian oil company Eni, said it now expected to make a net loss of €300 million to €350m this year instead of a profit of €450m.

Saipem is at the centre of corruption probes in Italy and in Algeria relating to large contracts that Saipem had entered with local gas giant Sonatrach, a long-standing business partner, and had already surprised the market with a profit warning in January which it blamed on weakening contract margins.