November 12, 2020
Highlights
- 2020 Directional1 EBITDA guidance increased from above US$900
million to around US$950 million despite challenging
environment
- 2020 Directional revenue guidance maintained at around US$2.3
billion
- Renewable energy: Floating Offshore Wind Provence Grand Large
project moving ahead
- Year-to-date Underlying Directional revenue of US$1,706
million
- Second Fast4Ward® hull for Prosperity project completed
Bruno Chabas, CEO of SBM Offshore,
commented:
“SBM Offshore is demonstrating the strength of
its business model with another good set of results last quarter,
despite the twin challenges of the global pandemic and low oil
prices. Based on this solid year-to-date performance and the
Company’s discipline in managing its cost base, the Company
increased its full-year guidance.
SBM Offshore teams are succeeding in maintaining
our focus on project delivery and safe operations, while working
together virtually, across time zones, with clients, suppliers and
all our other global stakeholders with the aim of limiting delivery
delays and interruptions to operations. Deepwater projects in
quality basins continue to rank favorably in client portfolios.
The energy transition remains at the core of the
Company’s strategy. This quarter saw an important milestone reached
with the start of the EPC phase of our first floating offshore wind
project in France. Leveraging the learnings from this pilot project
will enable SBM Offshore to further fine-tune its technology and
execution model and to scale up for future projects towards our
ambition to have 25% of revenues from Renewables & Gas by
2030.”
Financial Highlights
|
|
YTD Directional |
|
|
|
|
|
in US$ million |
|
3Q 2020 |
3Q 2019 |
% Change |
Revenue |
|
1,806 |
1,470 |
23% |
Lease and Operate |
|
1,334 |
972 |
37% |
Turnkey |
|
472 |
498 |
-5% |
Underlying Revenue |
|
1,706 |
1,470 |
16% |
Lease and Operate |
|
1,234 |
972 |
27% |
Turnkey |
|
472 |
498 |
-5% |
|
|
|
|
|
in US$ million |
|
3Q 2020 |
3Q 2019 |
|
Non-recurring items impact Revenue |
|
|
|
|
Deep Panuke redelivery |
|
100 |
- |
|
|
|
|
|
|
in US$ billion |
|
Sep-30-20 |
Dec-31-19 |
% Change |
Net Debt |
|
4.0 |
3.5 |
14% |
Backlog
calculation will be provided in FY20 Earnings Update |
|
|
|
|
Year to date, Underlying Directional revenues
were US$1,706 million compared with US$1,470 million in the third
quarter of 2019. This 16% increase resulted from higher revenues in
Lease and Operate, which were the result of FPSO Liza Destiny
joining the fleet at the end of 2019, together with last year’s
acquisition of a minority partner’s ownership in five Brazilian
FPSOs.
Underlying Directional revenues are adjusted for
the non-recurring revenue recognition of US$100 million related to
the redelivery of the Deep Panuke platform as reported with Half
Year 2020 earnings. This redelivery does not affect the
contractually agreed amount and timing of the cash consideration to
be received by the Company as per the initial contract.
Compared with year-end 2019, net debt as at the
end of the third quarter increased by c. US$0.5 billion to US$4.0
billion. While Lease and Operate continues to generate strong
operating cash flow, the Company is drawing under the project loan
facilities for continued investment in growth. As at September
2020, 76% of the debt consisted of non-recourse project financing,
with remaining debt linked to the financing of the projects under
construction. SBM Offshore is currently progressing with three
major projects (FPSOs Liza Unity, Prosperity and Sepetiba) using
the first three Multi-Purpose Floater (MPF) hulls in the Fast4Ward®
program. The fourth hull in the program is under construction, with
construction of the fifth not yet started.
Following the re-appointment of CEO Bruno Chabas
at the 2020 AGM, the implementation of his Base Salary increase to
EUR960,000 was deferred to a later stage when the effects of the
COVID-19 crisis would be clearer. With more visibility at present
and considering the financial results and the position of the
Company, the Supervisory Board resolved to implement the increase
of Bruno Chabas’ Base Salary effective January 1, 2020.
Project Review
SBM Offshore construction activities are reliant
upon global supply chains, which face challenges to varying degrees
from the pandemic. Project teams continue to work closely with
client teams and contractors to optimize cost or schedule impacts
and create alternatives for execution planning. An update on
individual projects is provided below.
FPSO Liza Destiny
Commissioning work on the natural gas injection
system of FPSO Liza Destiny is progressing with the main gas
compressors commissioned.
FPSO Liza Unity
The yards in Singapore re-opened during the last
quarter and the construction of the FPSO is progressing. The
mooring and riser structures integration was completed and the
Fast4Ward® MPF hull was moved from the dry-dock to the integration
quayside where the topsides integration phase has started with the
lifting of the first topsides modules. The project is progressing
in line with client schedule, with a planned completion in
2022.
FPSO Sepetiba
The Fast4Ward® MPF hull construction is
progressing at the yard in China, which is operating at planned
capacity since mid-year 2020. The modules fabrication continues to
progress in Brazil and China. The project is progressing with a
planned completion end 2022.
FPSO Prosperity
Following the contracts award announced on
October 1, 2020, the Prosperity project team is preparing for the
start of fabrication in Singapore. The Fast4Ward® MPF hull for the
project has been completed. The project is progressing in line with
client schedule with a planned completion in 2024.
Fast4Ward® MPF hulls
Under the Company’s Fast4Ward® program the total
number of hulls ordered to date stands at five. Three hulls are
allocated to projects: FPSOs Liza Unity, Prosperity and Sepetiba.
The two hulls allocated to FPSO Liza Unity and FPSO Prosperity are
completed.
Regarding the hulls not allocated to projects,
hulls number four and five, construction of the fourth hull is
making progress in line with SBM Offshore’s execution plan and
construction of the fifth hull is expected to start during the
fourth quarter of this year. These hulls support ongoing tendering
activity.
Operational Update
Due to the ongoing COVID-19 pandemic, business
continuity protocols remain in place. The Company is expanding its
internal Polymerase Chain Reaction (PCR) testing capability and
capacity, now available in most operating locations. This enables
the Company to reduce quarantine periods and to provide a more
efficient response if cases are identified. The priority remains to
prevent the occurrence of cases on board of the Company’s fleet and
in onshore locations and to minimize impact on operations.
Year to date, the Lease and Operate fleet uptime
stood at 98.8% compared to 99.5% at mid-year 2020.
Energy Transition and HSSE
Floating Offshore Wind
SBM Offshore is contracted by EDF Renouvelables for the
engineering, procurement, construction and installation of three
floating units and its mooring system, for offshore wind turbines
with a total capacity of 25.2 MW. The units will be deployed
offshore Marseille for the project Provence Grand Large. The
Company has progressed on the design and the turnkey phase is
ongoing.
Total Recordable Injury Frequency Rate
(TRIFR)
As at September 30, 2020, the Company’s
year-to-date TRIFR was 0.12, compared with the 2020 target of
0.20.
Outlook and Guidance
Supported by robust operational performance in
both Lease and Operate and Turnkey and effective cost discipline
measures, 2020 Directional EBITDA guidance is increased from
“above” US$900 million to “around” US$950 million. 2020 Directional
revenue guidance is maintained at “around” US$2.3 billion of
revenues, with “around” US$1.6 billion coming from Lease and
Operate and “around” US$0.7 billion coming from the Turnkey
segment.
Consistent with the Half Year 2020 earnings
update, this guidance excludes the exceptional positive impacts on
revenue and EBITDA resulting from the redelivery of the Deep Panuke
platform but includes negative impact on EBITDA resulting from the
company restructuring costs.
The Directional EBITDA and revenue guidance take
into account the currently foreseen COVID-19 impacts on projects
and fleet operations. The Company highlights that the direct and
indirect impact of the pandemic could have a material impact on the
Company’s business and results.
Conference Call
SBM Offshore has scheduled a conference call,
which will be followed by a Q&A session, to discuss the Third
Quarter 2020 Trading Update.
The event is scheduled for Thursday, November
12, 2020 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
to the call using the registration link:
https://www.kpneventcall.nl/EventRegistration/09b140d1-b9bb-448b-9bee-b24d923bfbdb
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.
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, 2019, the Company employs
approximately 4,450 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 12, 2020
Financial Calendar |
Date |
Year |
Full Year 2020 Earnings – Press Release |
February 11 |
2021 |
Annual General Meeting of Shareholders |
April 7 |
2021 |
Trading Update 1Q 2021 – Press Release |
May 12 |
2021 |
Half Year 2021 Earnings – Press Release |
August 5 |
2021 |
Trading Update 3Q 2021 – Press Release |
November 11 |
2021 |
For further information, please contact:
Investor RelationsBert-Jaap
DijkstraGroup Treasurer 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 RelationsVincent
KempkesGroup Communications Director
Telephone: |
+31 (0) 20 236 3170 |
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. This press release containsregulated 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.
- SBM Offshore 2020 3Q Trading Update
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