Good core performance; record backlog; outlook improved
August 7, 2013
SBM Offshore has made good operational progress, with underlying financial results ahead of our expectations. The Company continues to be on track in resolving its legacy issues. Directional1 Backlog reached a record level of US$22.4 billion including contracts for FPSOs Cidade de Maricá and Cidade de Saquarema for Petrobras, the Company's largest orders to-date. Oil production commenced on FPSO Cidade de Paraty in Brazil, and a US$600 million project loan was secured for FPSO N'Goma. Post-period, the Company announced it had been awarded the FPSO Stones by Shell for delivery to the Gulf of Mexico in 2016.
Bruno Chabas, CEO of SBM Offshore commented:
"I am strongly encouraged by the headway we have made in the first half. We have secured several outstanding contract awards and are on a much stronger footing, having both remedied a significant legacy issue and strengthened our balance sheet. Our management team can now concentrate on running the business and progressing our strategic transformation. Our focus on FPSOs is at the heart of this and our prospects give me confidence in our performance for the full year."
SBM Offshore is seeking to provide its shareholders and other stakeholders with clarity on business performance above and beyond the regular IFRS based disclosures. One complexity is that the Group's business model combines turnkey sales with construction projects for its own lease and operate portfolio. SBM Offshore's FPSO construction and lease and operate contracts are increasingly classified as 'finance leases' which adds further complexity by accelerating revenue recognition into the construction phase, well before rents are invoiced to and paid by the client. In this context, the Company is introducing 'Directional1' reporting alongside IFRS. Directional1 reporting seeks to present revenue and results in line with operating cash flows. This extended reporting includes a Directional1 Income Statement and Directional1 Backlog as part of the Financial Review.
- On a Directional1 basis, revenues were up 24% to US$1,669 million in H1'13, and underlying EBIT increased by 69% to US$297 million
- Letters of Intent for lease and operate contracts for two FPSOs from Petrobras (contracts executed post-period)
- Directional1 Backlog up by 36% to a record level of US$22.4 billion
- Cash at the end of the period was US$253 million; undrawn credit facilities of US$857 million
- Net debt at the end of June was US$2,300 million
- Agreement to decommission the Yme platform and settle outstanding issues with Talisman for US$470 million
- Successful 10% Rights Issue at €10.07 per share raised US$247 million
In light of recent operational progress, management is raising 2013 IFRS revenue guidance from US$4 billion to US$4.3 billion.
1Directional view is a non-IFRS disclosure, which corrects the non-cash effects on revenue and earnings introduced by IFRS finance lease accounting.
SBM Offshore has scheduled a webcast of its Analyst Presentation and a conference call followed by a Q&A session at 19:00 Central European Time on Wednesday, August 7, 2013.
The presentation will be hosted by Bruno Chabas (CEO), Peter van Rossum (CFO) and Sietze Hepkema (CGCO).
Interested parties are invited to listen to the call by dialing +31 20 794 8484 in the Netherlands or +44 207 190 1590 in the UK. Interested parties may also listen to the presentation via webcast through a link posted on the Investor Relations section of the Company's website.
A replay of the conference call will be available on Wednesday, August 7, 2013, beginning at 22:30 Central European Time for one week. The phone number for the conference call replay is +31 45 799 0028, using access code 4630686#. The webcast replay will also be available on the Company's website.
SBM Offshore N.V. is a listed holding company that is headquartered in Schiedam. 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 life-cycle. The Company is market leading in leased floating production systems with multiple units currently in operation, and has unrivalled operational experience in this field. The Company's main activities are the design, supply, installation and operation of Floating Production, Storage and Offloading (FPSO) vessels. These are either owned and operated by SBM Offshore and leased to its clients or supplied on a turnkey sale basis.
Group companies employ over 7,400 people worldwide, who are spread over five execution centers, eleven operational shore bases, several construction yards and the offshore fleet of vessels. 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 Board of Management
Schiedam, August 7, 2013
For further information, please contact:
Nicolas D. Robert
Head of Investor Relations
Telephone: +377 92 05 18 98
Mobile: +33 (0) 6 40 62 44 79
Group Communications Director
Telephone: +377 92 05 30 83
Mobile: +33 (0) 6 80 86 36 91
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Source: SBM Offshore N.V. via Thomson Reuters ONE