November 11, 2021
Highlights
- Strong performance despite ongoing COVID-19 challenges
- Financial results in line with management expectations and the
same period last year
- 2021 Directional1 EBITDA guidance maintained at around US$900
million
- 2021 Directional revenue guidance revised from around US$2.6
billion to above US$2.3 billion mainly driven by a deferral in the
expected timing of partner entry into an FPSO joint venture
- Year to date US$4.12 billion project related financings
arranged to fund record-breaking order book
- Liza Unity, first Fast4Ward® FPSO, safely arrived in Guyana, 1
of 5 major projects under construction
Bruno Chabas, CEO of SBM Offshore,
commented:
“I am proud to report that we have delivered
another set of solid results this quarter, in line with the
comparable period last year. The pandemic has significant impact
across all our activities and continues to test our staff’s
resilience. It is through their experience and dedication that we
were able to progress on projects and have excellent results in our
operations.
Under Lease and Operate, through our Ocean
Infrastructure platform, our teams are successfully ensuring
business continuity by applying the protocols limiting COVID-19
impacts and maintaining our assets’ availability. Year to date
operational uptime stands at an outstanding level of 99.2%.
Under Turnkey, through our Growing the Core
platform, there are five projects in execution. FPSO Liza Unity has
safely arrived in Guyana in line with client planning, following a
successful construction and pre-commissioning campaign in
Singapore. Although the pandemic continues to create challenges
which make cost increases unavoidable, our teams are doing an
excellent job in mitigating and minimizing impacts. At project
portfolio level, SBM Offshore has been able to maintain a
competitive level of performance.
Through our New Energies platform, our teams
continue to pave the way for the Company’s transition through
technology development and strategic partnerships to capture new
energy market opportunities. An extensive study is underway to
drive cost out of the next generation of our Floating Offshore Wind
solution.
Year to date, we have closed a record-breaking
$4.1 billion of project financings. This demonstrates not only SBM
Offshore’s financial strength but also evidences the confidence
that our financial stakeholders have in the role that SBM Offshore
will continue to play as leader in the energy transition for its
clients.
We also successfully completed our fourth share
repurchase program in six years. More than US$1.2 billion has now
been returned to shareholders during this period in dividends and
share buybacks.”
Financial Overview
|
|
Directional |
|
|
|
|
|
in US$ million |
|
3Q 2021 |
3Q 2020 |
% Change |
Revenue |
|
1,654 |
1,806 |
-8% |
Lease and Operate |
|
1,134 |
1,334 |
-15% |
Turnkey |
|
519 |
472 |
10% |
Underlying Revenue |
|
1,729 |
1,706 |
1% |
Lease and Operate |
|
1,209 |
1,234 |
-2% |
Turnkey |
|
519 |
472 |
10% |
|
|
|
|
|
in US$ million |
|
3Q 2021 |
3Q 2020 |
|
Non-recurring items impacting Revenue |
|
|
|
|
Deep Panuke termination fee |
|
(75) |
100 |
|
|
|
|
|
|
in US$ billion |
|
3Q 2021 |
Dec-31-20 |
% Change |
Net Debt |
|
5.1 |
4.1 |
24% |
Backlog calculation will be provided in FY21
Earnings Update
Year to date, Underlying Directional revenues
came in at US$1,729 million compared with US$1,706 million in the
same period of 2020. Turnkey revenues increased by 10% or US$47
million compared with the same period last year reflecting the
higher level of activity. Lease and Operate was nearly constant
with a decrease of 2% or US$25 million compared with the same
period last year.
Underlying Directional revenues include US$75
million related to cash received during the first half of 2021
under the final settlement signed with the client following the
redelivery of the Deep Panuke facility in July 2020. This amount
was excluded from the Underlying 2020 Revenues as reported in the
2020 Annual Report given the expected receipt of the associated
cash in 2021.
Year to date, net debt increased to US$5.1
billion driven by investments in growth as the Company is
progressing with the construction of its five major projects (FPSOs
Liza Unity, Sepetiba, Prosperity, Almirante Tamandaré and Alexandre
de Gusmão). Nearly all of the Company’s debt is project related and
as such becomes non-recourse following project execution
finalization and release of the Parent Company Guarantee.
Framework Agreement between Sinosure and SBM
Offshore
On October 20, 2021, China Export and Credit
Insurance Corporation (Sinosure) and SBM Offshore signed a
Framework Agreement. This Agreement follows the successful
cooperation between Sinosure and SBM Offshore on the closing of the
Project Finance of Sepetiba, which includes a significant tranche
benefiting from Sinosure insurance cover which will be funded by
three relationship banks. The Agreement aims to build on this
cooperation for future projects, optimizing both growth in trade
and economic development in China as well as obtaining Sinosure
insurance cover and support in closing future financings.
Project Review
Around 18 months into the global pandemic, the
Company continues to face COVID-19 challenges. These include travel
and logistical restrictions, price inflation of materials and
services, yard closures and yard and supplier capacity constraints.
Project teams continue to work closely with client teams and
contractors to mitigate the impacts on projects’ execution. The
degree to which these challenges can be mitigated going forward
varies from project to project. Despite this, the profitability of
SBM Offshore’s overall project portfolio remains robust and
competitive. An update on the status of individual projects is
provided below.
Liza Unity (FPSO) left Singapore early September
and arrived in Guyana on October 25. The project continues to
target first oil in 2022 in line with client schedule.
FPSO Sepetiba - the topsides’ modules lifting
campaign has started at the yard in China and the project targets
first oil in 2023. The project has been impacted both by the supply
chain environment and challenges at the yard. A specific mitigation
plan has been implemented and its effectiveness is to be tested in
the coming quarters.
Prosperity (FPSO) - the Fast4Ward® MPF hull
entered dry dock in Singapore and the topsides' fabrication is
progressing in line with project schedule.
FPSO Almirante Tamandaré - the topsides'
fabrication is progressing as planned with the commencement of
topside construction activities in Brazil. The keel laying
milestone has been achieved for the Fast4Ward® MPF hull. The
project continues to target first oil in the second half of
2024.
FPSO Alexandre de Gusmão - the Fast4Ward® MPF
hull construction achieved the first steel cutting milestone in the
third quarter 2021. The FPSO construction is progressing as per
plan with the expected first oil in 2025.
Fast4Ward® MPF hullsUnder the Company’s
Fast4Ward® program, the total number of MPF hulls ordered to date
stands at six. Three have been delivered to on-going projects and
three are under construction of which two have been allocated to
FPSO projects and one is supporting the Company’s tendering
activities.
Liza Destiny (FPSO) - The flash gas compression
system on the unit is stable and continues to operate. The
construction of the redesigned third stage flash gas compression
system is progressing.
Fleet Operational Update
Despite the continuing challenging circumstances
due to the COVID-19 pandemic, the Company is witnessing some
improvements in the general operating environment, especially in
countries where vaccination campaigns are progressing. Although
business continuity protocols remain in place, some countries’
entry restrictions and quarantine periods are being gradually
reduced with a positive impact on fatigue management and associated
operational risk. The priority of the Company remains to minimize
the potential exposure to COVID-19, to protect the health of our
employees and to minimize the impact on SBM Offshore
operations.
The fleet uptime continues to demonstrate the
depth of the experience and success of the SBM Offshore Operations
team in mitigating the impact of the pandemic. Year to date, the
Lease and Operate fleet uptime was 99.2%, in line with the fleet’s
lifetime historical average.
Safety
The Company’s Total Recordable Injury Frequency
Rate stands at 0.08 as of September 30, 2021.
Joint Venture Equity
Partnering Update
As previously announced, SBM Offshore is
negotiating a 45% equity divestment in the special purpose
companies that are owning and operating the FPSOs Almirante
Tamandaré and Alexandre de Gusmão. The divestment of equity in the
FPSO Almirante Tamandaré is expected to be concluded around the
year end and the divestment of the FPSO Alexandre de Gusmão in the
course of 2022. For the purposes of the guidance, it is assumed
that the divestment of the FPSO Almirante Tamandaré is closed after
the year end resulting in a shift in recognition of the associated
revenues from 2021 to 2022. There is no impact on anticipated
EBITDA for 2021 as the project is not forecast to meet the
requisite completion stage gate allowing margin recognition in
2021.
Outlook and Guidance
The Company’s 2021 Directional EBITDA guidance
is maintained at around US$900 million. 2021 Directional revenue
guidance has been revised from around US$2.6 billion to above
US$2.3 billion with around US$1.6 billion coming from Lease and
Operate and above US$0.7 billion coming from the Turnkey segment.
As described above, this revision is mainly driven by an assumed
shift in the expected timing of partner entry into FPSO Almirante
Tamandaré joint venture from late 2021 to early 2022.
This guidance includes Directional revenues and
EBITDA of US$75 million related to the cash receipts in 2021 from
the Deep Panuke contract, which were both excluded from the 2020
outlook and underlying results. It also considers the currently
foreseen COVID-19 impacts on projects and fleet operations. The
Company highlights that the direct and indirect impact of the
pandemic could continue to have a material impact on the Company’s
business and results and the realization of the guidance for
2021.
Conference Call
SBM Offshore has scheduled a conference call,
which will be followed by a Q&A session, to discuss the Third
Quarter 2021 Trading Update.
The event is scheduled for Thursday, November
11, 2021 at 10.00 AM (CET) and will be hosted by Bruno Chabas
(CEO), Douglas Wood (CFO), Philippe Barril (COO) and Erik Lagendijk
(CGCO).
Interested parties are invited to register prior
the call using the
link:https://www.kpneventcall.nl/EventRegistration/4457da36-e770-49d7-9f95-0519361a00af
Please note that the conference call can only be
accessed with a personal identification code, which is sent to you
by email after completion of the registration.
A replay will be available. Interested parties
can listen to the replay by dialing +31 (0) 20 785 1180 and using
access code 120362# until December 11, 2021.
Corporate Profile
The Company’s main activities are the design,
supply, installation, operation and the life extension of floating
production solutions for the offshore energy industry over the full
lifecycle. The Company is market leading in leased floating
production systems, with multiple units currently in operation.
As of December 31, 2020, the Company employed
approximately 4,570 people worldwide spread over offices in our key
markets, operational shore bases and the offshore fleet of
vessels.
SBM Offshore N.V. is a listed holding company
headquartered in Amsterdam, the Netherlands. It holds direct and
indirect interests in other companies.
Where references are made to SBM Offshore N.V.
and /or its subsidiaries in general, or where no useful purpose is
served by identifying the particular company or companies “SBM
Offshore” or “the Company” are sometimes used for convenience.
For further information, please visit our
website at www.sbmoffshore.com.
The Management BoardAmsterdam, the Netherlands,
November 11, 2021
Financial Calendar |
Date |
Year |
Full Year 2021 Earnings |
February 10 |
2022 |
Annual General Meeting |
April 6 |
2022 |
First Quarter 2022 Trading Update |
May 12 |
2022 |
Half Year 2022 Earnings |
August 4 |
2022 |
Third Quarter 2022 Trading Update |
November 10 |
2022 |
For further information, please contact:
Investor RelationsBert-Jaap
DijkstraGroup Treasurer and IR
Mobile: |
+31 (0) 6 21 14 10 17 |
E-mail: |
bertjaap.dijkstra@sbmoffshore.com |
Website: |
www.sbmoffshore.com |
Media RelationsVincent
KempkesGroup Communications Director
Mobile: |
+377 (0) 6 40 62 87 35 |
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. This press release contains regulated information
within the meaning of the Dutch Financial Markets Supervision Act
(Wet op het financieel toezicht). 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 in the Financial
Statements under Operating segments and Directional 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 reporting in this document.2 Financing
closed at SPV levels with varying SBM Offshore equity ownership;
100% of the financing amount is disclosed.
- SBM Offshore 3Q21 Trading Update
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