TechnipFMC (NYSE: FTI) said a 10% upswing in revenue showed the energy industry was poised for growth, as the group looks to cut debt and buy back “undervalued” shares.
The subsea-focused offshore services group reported pre-tax profits of $27.6m in its quarterly earnings filings, reversing a $6m loss in the previous quarter.
Total revenue for Q2 stood at just over $1.7 billion, while adjusted EBITDA excluding tax charges and credits was $186.5m. Total backlog also grew to over $9bn.
Notably, the engineering group cut debt by more than $530m during the quarter, leaving $1.5bn gross debt and $790m net.
Accordingly, the company’s board authorised a new share repurchase programme, under which it will look to buy back up to $400 million of its outstanding ordinary shares, equivalent to around 14% at Wednesday’s closing price.
The board also reaffirmed its intent to initiate a quarterly dividend during the second half of 2023.
In a statement accompanying the results, chairman and chief executive officer Doug Pferdehirt noted: “Our debt reduction reached an important milestone in the quarter, providing us with the flexibility to initiate shareholder distributions as evidenced by the new share repurchase program.
“We firmly believe that our shares are undervalued, and this action underscores our confidence in the long-term outlook for our company.”
Looking at the wider business environment, Mr Pferdehirt said the first half of the year saw the company secure contracts for 117 subsea trees – nearly double the volume of trees it sold in full-year 2021.
He said the figure served as “further indication that the industry is in full growth mode.”
Indeed, revenue from the group’s subsea unit rose by nearly 10% to $1.4bn, on the back of more activity in Africa, the North Sea and Brazil. Subsea services revenue also rose on last quarter, on the in the wake of greater installation work.
The company hailed significant contract awards for projects including ExxonMobil’s Yellowtail off Guyana, the Equinor Halten East offshore Norway and TotalEnergies’ CLOV3 project in Angola.
Mr Pferdehirt also pointed to an award earlier in July for Equinor’s BM-C-33 project off Brazil which, if taken to final investment decision, would be “one of the single largest integrated awards to date for the industry.”
The group also highlighted the success of Orbital Marine Power in the UK’s recent Contract for Difference (CfD) allocation round, which secured awards to support 7.2MW of multi-turbine projects in Orkney.
Orbital is collaborating with TechnipFMC to accelerate the commercialisation of its tidal stream turbine.
Meanwhile, its surface technologies unit also saw an uptick of 13.5% in Q2 revenues to over $302m, due to growth in drilling and completion activity in North America.
“Based on our results, the growing project pipeline, and the active dialogue with our large and expanding customer base, we expect full-year subsea orders will be up as much as 40% versus the prior year, above our previous forecast of 30%, with orders now approaching $7 billion in 2022,” Mr Pferdehirt said.