SBM Offshore reported a slump in profits for the first half of the year, missing estimates and falling below 2022 levels.
Pre-tax profits at group (SBMO.AS) – which designs, builds and operates offshore floating energy facilities – fell to $304 million for the first half of the year, compared with $383m for the same period in 2022.
However revenue increased by 2% to $2.45bn – an increase it said was mainly driven by its lease and operate business – while total order book backlog reached a “record-level” $32.2bn.
CEO Bruno Chabas said the group was still dealing with “the after-effects of the pandemic plus supply chain and inflationary constraints” but that the increase to its order book and a steady guidance guidance for the rest of the year “underline the fact that our strategy as an energy transition company is delivering results.”
Directional backlog – which concerns the company’s lease and operations contracts – increased by $1.7 billion compared with its position at the end of 2022.
The increase was mainly the result of the signed 10-year operations and maintenance enabling agreement for the Guyana FPSO fleet, partially offset by turnover for the period which consumed approximately $1.5 billion of backlog.
Meanwhile the company’s “turnkey” unit, which sells FPSOs to operators, fell to an EBITDA loss of $37m compared with $16m profit last year,
Despite the constraints however Mr Chabas added that: “We are progressing the remaining projects under construction and the overall margin remains robust at portfolio level.”
“With the closing of the financing for the FPSO Alexandre de Gusmão in June, financing is now in place for the entire construction portfolio. Including the FPSO Almirante Tamandaré financing, we have secured over $3.2 billion so far this year which is a remarkable achievement in today’s challenging environment,” he added.
“The economics and low emission qualities of deepwater resources mean that they will play a leading role in fulfilling future demand through the Energy Transition, where the FPSO is the solution of choice. Given the evolution of the financing market, new models and sources of finance will need to mature and evolve.”
SBM held its revenue guidance is maintained at above $2.9 billion – of which around $1.9 billion is expected from the leasing and operations, and above $1 billion from turnkey.
It noted that ExxonMobil Guyana has indicated that it is contemplating the exercise of its contractual purchase option to acquire the FPSO Liza Unity towards the end of 2023, slightly ahead of the end of the maximum lease term in February 2024, which could affect directional backlog in future.
In turnkey, SBM holds two un-allocated Multi-Purpose Floater (MPF) hulls under construction, which it said would “further strengthen” its ability to secure new opportunities.
The total number of MPF hulls ordered to date under the company’s Fast4Ward program stands at eight, with six delivered to projects and exclusivity for the seventh granted to ExxonMobil Guyana.
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