May 16, 2019
Highlights
- Year-to-date Directional1 revenue of US$456 million
in line with expectation
- Award of second FPSO for Liza project in Guyana confirmed
- Third Fast4WardTM hull ordered with a second yard
- Share Repurchase Program on track with 93% completed
- Directional net debt of US$2.7 billion at the end of March
2019
Bruno Chabas, CEO of SBM Offshore,
commented:
“SBM Offshore’s performance over the first
quarter of 2019 has been on target and our guidance for the full
year remains unchanged. Our operations continue to demonstrate
strong performance and our projects under construction are
progressing as expected and to the satisfaction of our clients.
FPSO Liza Destiny entered the final phase of construction and
commissioning at the yard in Singapore.
As regards new orders, with the award of the
second FPSO for the Liza project in Guyana, Liza Unity, SBM
Offshore’s Fast4WardTM philosophy has moved from plan to reality,
with the first standard hull now allocated. Construction of this
hull is progressing according to plan, with the major steel
structure now in dry-dock. The project will see several standard
topsides being adopted from our catalogue.
Driven by ongoing client capital discipline, the
offshore industry upturn remains concentrated on very large, high
quality field developments, which benefit most from our Fast4WardTM
concept. As clients mature their conceptual designs, our visibility
of future opportunities continues to improve. In anticipation of
this upturn, SBM Offshore ordered the third Fast4WardTM hull from a
second yard.
The fact that Fast4WardTM is now very much a
reality, combined with our efficient financing model and
organization, means that our growth engine, Turnkey, is well
positioned to increase cash flow and value.”
Financial Highlights
|
|
YTD Directional |
|
|
|
|
|
in US$ million |
|
1Q 2019 |
1Q 2018 |
% Change |
Revenue |
|
456 |
385 |
18% |
Lease and Operate |
|
311 |
331 |
-6% |
Turnkey |
|
145 |
54 |
169% |
|
|
|
|
|
in US$ billion |
|
Mar-31-19 |
Dec-31-18 |
% Change |
Net Debt |
|
2.7 |
2.4 |
13% |
Backlog
calculation will be provided in 1H19 Earnings Update |
|
|
|
|
Directional revenues over the first quarter of
this year came in at US$456 million, compared with US$385 million
in the first quarter of 2018. This 18% or US$71 million increase in
revenue was caused by Turnkey which benefited from a continued
increase in activity with in particular progress made on the Johan
Castberg turret project. First quarter revenues in Lease and
Operate decreased by 6% or US$20 million in the first quarter of
2019 compared with the same period last year. This decrease was
caused by vessels that left the fleet during 2018 (FPSO Turritella,
FSO Yetagun and FSO N’Kossa II).
Net debt increased by c. US$300 million from
year-end 2018 to US$2.7 billion as at the end of 1Q19. While Lease
and Operate continues to generate strong operating cash flow, the
use of cash balances for the continuing investment in growth (FPSO
Liza Destiny and Fast4WardTM), the share buyback and payment to
Repsol for its share of the Yme insurance claim proceeds led to an
increase in net debt.
As of 1Q19, the Company has started to draw
under its recently updated Revolving Credit Facility for an amount
of c. US$60 million. The available US$720 million facility related
to the Liza Destiny project remained undrawn. The Company expects
to draw the facility in full before the FPSO reaches first oil.
Furthermore the process to implement specific project financing for
the Liza Unity project is already underway. As the respective
vessels enter the operating phase, these new facilities will become
non-recourse to the SBM Offshore corporate balance sheet and cash
flow (as is the case for the current portfolio of project debt tied
to the existing fleet).
Project Review
FPSO Liza Destiny
The project is on schedule and the FPSO is in
the final construction, integration and commissioning stage.
Turret Mooring System (TMS) Johan Castberg
FPSO
Work on the TMS for Equinor’s Johan Castberg
FPSO is progressing well, in line with the client’s schedule.
Fast4WardTM hulls
As previously announced, SBM Offshore signed a
contract for the construction of a third Fast4WardTM hull. This
third hull will be constructed by China Merchants Industry Holdings
(CMIH). CMIH Ltd is a subsidiary of the China Merchant Group with
two modern facilities in China. The Jiangsu Shanghai yard tasked
with the execution of the SBM Offshore third Fast4WardTM hull is a
world-class yard specialized in new build offshore vessels and
structures with experience in a number of large projects since
2013.
Following the award for the Liza Unity FPSO,
announced on May 10, 2019, the Company’s first Fast4WardTM hull was
allocated to this project.
Operational Update
Fleet uptime during the first quarter of 2019
was 98.8%. This uptime is after taking account of the effects of
the final stages of the long term maintenance and upgrade
activities on FPSO Capixaba.
HSSE
The Company continued to build on its track
record of strong safety performance, with a total recordable injury
frequency rate (TRIFR) of 0.07 over the first quarter of 2019. SBM
Offshore continues to generate awareness and focus on safety
through various programs and initiatives.
Post-Period Events
Dividend
On April 10, 2019, the Annual General Meeting of
Shareholders (AGM) voted in favor of the proposed of US$75 million
dividend, which represents a dividend distribution of US$0.3721 per
ordinary share. The dividend was paid on May 3, 2019 to all
shareholders of record as at April 15, 2019. Dividends were paid in
Euros using an exchange rate of 1.1270, which equates to EUR 0.3302
per ordinary share. This dividend represents a c. 50% increase per
share compared to last year and a pay-out of c. 25% of full year
2018 Directional net result.
Progress Share Repurchase
Program
The ongoing EUR175 million Share Repurchase
Program, which was announced and commenced on February 14, 2019, is
making good progress and has reached 93% completion as of May 15,
2019 after market close. As per this date, under this program, the
Company has repurchased 9.7 million shares. Transaction details can
be found on the Company’s website.
Guidance
2019 Directional revenue guidance is maintained
at around US$2 billion of revenues, with around US$1.3 billion
coming from Lease and Operate and around US$0.7 billion from the
Turnkey segment. 2019 Directional EBITDA guidance is maintained at
around US$750 million.
Conference Call
SBM Offshore has scheduled a conference call
followed by a Q&A session on Thursday, May 16, 2019 at 10:00
(CET).
The call will be hosted by Bruno Chabas (CEO),
Philippe Barril (COO), Erik Lagendijk (CGCO) and Douglas Wood
(CFO). Interested parties are invited to listen to the call
by dialing +31 (0) 20 531 5851 in the Netherlands, +44 (0) 20 3365
3210 in the UK or +1 866 349 6093 in the US.
A replay will be available shortly after the end
of the conference call. Interested parties can listen to the replay
by dialing +31 (0) 20 530 0220 and using access code 549014# until
June 16, 2019.
Corporate Profile
SBM Offshore N.V. is a listed holding company
that is headquartered in Amsterdam. It holds direct and indirect
interests in other companies that collectively with SBM Offshore
N.V. form the SBM Offshore Group (“the Company”).
SBM Offshore provides floating production
solutions to the offshore energy industry, over the full product
lifecycle. The Company is market leading in leased floating
production systems delivered to date, with multiple units currently
in operation and has unrivalled operational experience in this
field. The Company’s main activities are the design, supply,
installation, operation and the life extension of floating
production solutions for the offshore energy industry.
As of December 31, 2018, Group companies employ
approximately 4,350 people worldwide, including circa 650
contractors, which are spread over offices in key markets,
operational shore bases and the offshore fleet of vessels. Group
Companies employ a further 400 people, working for the joint
ventures with two construction yards. For further information,
please visit our website at www.sbmoffshore.com.
The companies in which SBM Offshore N.V.
directly and indirectly owns investments are separate entities. In
this communication “SBM Offshore” is sometimes used for convenience
where references are made to SBM Offshore N.V. and its subsidiaries
in general, or where no useful purpose is served by identifying the
particular company or companies.
The Management BoardAmsterdam, the Netherlands,
May 16, 2019
Financial Calendar |
Date |
Year |
Half-Year 2019 Earnings – Press Release |
August 8 |
2019 |
Trading Update 3Q 2019 – Press Release |
November 14 |
2019 |
Full-Year 2019 Earnings – Press Release |
February 13 |
2019 |
Annual General Meeting of Shareholders |
April 8 |
2020 |
Trading Update 1Q 2020 – Press Release |
May 14 |
2020 |
For further information, please contact:
Investor RelationsBert-Jaap
DijkstraDirector Corporate Finance and IR
Telephone: |
+31 (0) 20 236 3222 |
Mobile: |
+31 (0) 6 21 14 10 17 |
E-mail: |
bertjaap.dijkstra@sbmoffshore.com |
Website: |
www.sbmoffshore.com |
Media Relations Vincent
KempkesGroup Communications Director
Telephone: |
+31 (0) 20 2363 170 |
Mobile: |
+31 (0) 6 25 68 71 67 |
E-mail: |
vincent.kempkes@sbmoffshore.com |
Website: |
www.sbmoffshore.com |
Disclaimer
This press release contains inside information
within the meaning of Article 7(1) of the EU Market Abuse
Regulation. Some of the statements contained in this release that
are not historical facts are statements of future expectations and
other forward-looking statements based on management’s current
views and assumptions and involve known and unknown risks and
uncertainties that could cause actual results, performance, or
events to differ materially from those in such statements. Such
forward-looking statements are subject to various risks and
uncertainties, which may cause actual results and performance of
the Company’s business to differ materially and adversely from the
forward-looking statements. Certain such forward-looking statements
can be identified by the use of forward-looking terminology such as
“believes”, “may”, “will”, “should”, “would be”, “expects” or
“anticipates” or similar expressions, or the negative thereof, or
other variations thereof, or comparable terminology, or by
discussions of strategy, plans, or intentions. Should one or more
of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially
from those described in this release as anticipated, believed, or
expected. SBM Offshore NV does not intend, and does not assume any
obligation, to update any industry information or forward-looking
statements set forth in this release to reflect subsequent events
or circumstances. Nothing in this press release shall be
deemed an offer to sell, or a solicitation of an offer to buy, any
securities.
[1] Directional view, presented under IFRS8
Segment reporting, represents a pro-forma accounting policy, which
assumes all lease contracts are classified as operating leases and
all vessel investees are proportionally consolidated. This
explanatory note relates to all Directional in this document.
- SBM Offshore 2019 1Q Trading Update
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