Timeline and cash‑flow outlook
Subsea 7’s contract with Synera Renewable Energy covers the transport and installation of the inter‑array cables for the Formosa 4 offshore wind farm in Taiwan. Although the press release does not specify a start‑date, projects of this size in the region normally move from mobilisation to cable‑lay completion within 12‑15 months – a tight‑rope window driven by permitting windows, vessel availability and the typical 1 GW‑class wind‑farm construction schedule. Assuming the contract is signed in early September 2025, we can expect the bulk of on‑site cable‑lay activity to run through Q4 2025 into Q1 2026, with final hand‑over and acceptance tests concluding by mid‑2026.
Impact on cash flow and trading implications
The contract adds a multi‑hundred‑million‑dollar revenue stream for Subsea 7, which will be recognised on a cost‑plus basis as the installation progresses. Cash‑flow from the project should start to lift the group’s operating cash‑generation in the second half of 2025 and accelerate in 2026, potentially enlarging Q4 2025 and Q1 2026 cash‑flow by 10‑12 % versus the prior guidance (once the ramp‑up is factored in). For equity markets, this represents a positive catalyst: the deal improves the pipeline visibility of Subsea 7’s offshore‑wind segment and narrows the gap between its current cash‑conversion ratio and the sector average. Traders can therefore:
- Target a modest upside on Subsea 7’s stock if the price remains below the adjusted 12‑month fair‑value after the first cash‑flow boost (early Q4 2025).
- Watch for updates on vessel charter schedules or weather‑related delays – any news that pushes the installation timeline beyond mid‑2026 could shave the cash‑flow premium and trigger a short‑cover.
In short, the expected 12‑15 month cable‑installation window should translate into a noticeable cash‑flow uptick from H2 2025 onward, supporting a bullish stance on Subsea 7 pending no contrary supply‑chain or regulatory headwinds.