SBM Offshore's H1 Core Profit Misses Estimates, Falls Below 2022 level

August 10, 2023

World Energy Reports LLC.

Dutch oil and gas services company SBM Offshore reported on Thursday half-year earnings before interest, tax, depreciation, and amortization (EBITDA) that missed consensus estimates and fell below the level seen a year earlier.

The group, which supplies and operates floating production, storage, and offloading (FPSO) vessels, posted half-year directional EBITDA at $457 million, below the $526 million forecast by a company-compiled consensus and down 9% from one year ago. 

Directional reporting treats all lease contracts as regular operating leases and proportionally combines co-owned investments related to the leases, based on the ownership percentage of each party involved.

The Turnkey EBITDA contribution was a loss of $37 million, down 330% from a year ago, mainly attributed to challenges in mitigating supply chain and pandemic impacts, reduced FPSO Almirante Tamandaré contribution, and the absence of prior period gains, the group said in a statement. 

"It should be noted that in Directional Turnkey EBITDA, the result is mainly driven by the margin made on the portion of FPSOs sold to partners," the company said, adding that this doesn't encompass the margin earned from SBM Offshore's ownership share in the ongoing construction of five FPSOs.

Revenue was $1,491 million, in line with consensus but down 15% from the same period in 2022, also hit by its directional turnkey revenue falling 39% to $558 million.

The group reported total pro-forma order book of$32.2 billion at June 2023, up 3.54% year-on-year, mainly driven by signed operations and maintenance enabling agreements. It said that this backlog provides cash flow visibility up to 2050.

The company maintained its 2023 revenue and EBITDA guidance, considering potential effects of the Russia-Ukraine conflict, with potential adjustments to guidance if ExxonMobil Guyana acquires the FPSO Liza Unity end-2023.

(Reuters - Reporting by Dina Kartit; Editing by Christopher Cushing and David Evans)

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