SBM Offshore Half Year 2020 Earnings

Alleen voor leden beschikbaar, wordt daarom gratis lid!

Algemeen advies 06/08/2020 07:21
- On target despite global disruption
Highlights
Effective response to COVID-19 and oil price crises
Successfully maintaining focus on health and safety of staff and business continuity
Adapting the organization to ensure flexibility, performance and competitiveness
Financial results in line with expectation
2020 Directional[1] EBITDA guidance increased from “around” to “above” US$900 million
2020 Directional revenue guidance maintained at “around” US$2.3 billion

The 2020 Half Year Results and Interim Financial Statements are published on the Company’s website under https://www.sbmoffshore.com/investor-relations-centre/financial-information/financial-results/half-year-results/.

Bruno Chabas, CEO of SBM Offshore, commented:

“Over the last six months, SBM Offshore has successfully navigated a challenging period, having mitigated the COVID-19 crisis at our construction projects, in the fleet and through remote working. Our Lease and Operate team has not only kept the fleet’s uptime at historical highs but also created a COVID-19-free environment offshore. Our project teams in Turnkey are working together with client and supplier teams in order to mitigate impacts.

The financial results during the period and full year guidance remain in line with management expectation, which demonstrates the robustness of SBM Offshore’s business model and its effective response. At the same time, the COVID-19 crisis is having a profound impact on the energy industry, not only in the short term but expected also for the longer term future.

In today’s environment, clients require faster, lower carbon intensive and lower cost oil production. SBM Offshore’s emissionZEROTM program and our current technology offering bring lower carbon intensity and cost efficient solutions to our clients. Industry cycles are expected to become even shorter. In response to this reality, we are adapting SBM Offshore’s organization to ensure flexibility, performance and competitiveness, regardless of the phase in the cycle. Specialized centers will create local content and build on the Company’s experience while decreasing emissions and increasing cost competitiveness through standardization brought by the Fast4Ward® program.

SBM Offshore will continue to adapt while the energy market transforms. We are committed to delivering solutions to clients in order to make the energy transition a reality and to reduce the carbon intensity of our business.”

Directional revenue for the first half year of 2020 came in at US$1,179 million, an increase of 22% compared with the same period in 2019, mainly driven by the Lease and Operate segment. Year-to-date Directional revenue from Lease and Operate was US$829 million compared with US$646 for the first half of 2019. The increase in Directional revenue from Lease and Operate mainly resulted from FPSO Liza Destiny joining the fleet after achieving first oil at the end of 2019 and the Company’s increased ownership in the Lease and Operate entities related to the five Brazilian FPSOs purchased by the Company in the second half of 2019. Directional Turnkey revenue increased by 10% to a total of US$351 million for the period.

Directional EBITDA for the first half year of 2020 totaled US$523 million, representing a 31% or US$123 million increase compared with the year-ago period. Directional Lease and Operate EBITDA increased by 27% or US$113 million to a total of US$538 million compared with first half of 2019. This increase is caused by the same drivers as the increase in Lease and Operate revenue. The incremental costs from the implementation of additional safety measures linked to COVID-19 have been partially recharged to clients under reimbursable contracts. The Company was able to mitigate most of the remaining net cost by improved operational performance. Directional Turnkey EBITDA increased by US$20 million to a total of US$25 million, mainly reflecting the growth in Turnkey activities and discipline in project execution. Compared with the first half of 2019, Other cost increased by US$10 million to US$40 million. This increase mainly resulted from one-off legal and tax expenses and investment in the Company’s digital initiatives.

The construction activities on FPSOs did not significantly contribute to gross margin in the first half of 2020 under Directional reporting, because FPSO Sepetiba has not yet reached the gate progress of completion allowing margin recognition under the Company’s policy. As such, revenue is recognized only to the extent of cost incurred. In addition, the Liza Unity project and the limited scope from the Prosperity project are 100% owned by the Company and classified as operating lease as per Directional accounting policies. As such, these projects do not contribute to the Company’s net result before first oil. For more details, refer to SBM Offshore’s Directional accounting principles in chapter 4.3.2 of the Company’s 2019 Annual Report.

Underlying Directional net profit for the first half year of 2020 totaled US$94 million, or US$0.50 per share, an increase of 55% compared with the same period last year. Underlying Directional net profit is adjusted for the non-recurring impairment of US$57 million related to the SBM Installer (refer to Impairment Review section below for more details).

Impairment Review

In light of the significantly deteriorated outlook in the offshore support vessel market, the Company has impaired the remaining book value of the right-of-use asset and other related fixed assets associated with the SBM Installer vessel for a total of US$57 million.

An additional aggregate US$31 million of impairments, individually not material, was recognized relating to partial impairment of two units and increased impairment loss on certain financial assets. For more details, refer to the 2020 Half Year Interim Financial Statements.

Adapting the Business Model

The Company’s strategy is set to adapt its products and business model to an environment of shorter oil price cycles and increased volatility. Consequently, the Company is taking action to reorganize the allocation of activities in our centers in order to become more efficient, building on our Fast4Ward® and emissionZEROTM programs. The capacity of our center located in India, supporting the Company’s EPC (engineering, procurement and construction) activities and fleet support for operations, will be increased. These measures will enable the Company to lower its break-even point and allow the Company to scale activities in line with market demand.

Unfortunately, the need to lower our cost base will lead to job losses. Compared with year-end 2019, the reorganization is expected to lead to a reduction of c. 600 positions[3]. The annualized cost of these positions is c. US$100 million. Restructuring costs are expected to be c. US$50-60 million, mainly booked in the second half of 2020.

SBM Offshore is maintaining its ability to win two to three FPSO orders per year. Investments into the energy of the future (e.g. gas and renewables) continue as planned.

Funding and Directional Net Debt

Directional net debt increased by US$419 million to US$3,879 million as of June 30, 2020. While the Lease and Operate segment continues to generate strong operating cash flow, the Company drew under the project loan facilities of FPSO Liza Destiny and FPSO Liza Unity to fund the continued investment in growth.

The majority of the Company’s debt as of June 30, 2020 consisted of non-recourse project financing (US$2.7 billion). Under the Liza Unity and Destiny projects, a total of US$1.3 billion of debt was drawn. The Company’s Revolving Credit Facility (RCF) was drawn for c. US$70 million and the net cash balance stood at c. US$300 million. Lease liabilities totaled c. US$ 150 million. The pre-completion parent company guarantee related to the US$720 million Liza Destiny project loan was released on July 31, 2020. The project loan in the related special purpose company has become non-recourse.

At June 30, 2020 the average interest rate for the Company’s debt stood at 4.3%, compared with 4.9% at year-end 2019.

During the period, a US$600 million bridge loan facility was secured by the special purpose company owning FPSO Sepetiba to finance its ongoing construction. Repayment is expected to take place upon closure and first drawdown of the project loan for which negotiations continue to progress.

As at June 30, 2020 the Company had a total liquidity position of US$2.1 billion. This consisted of available balances under the RCF (US$0.9 billion) and undrawn loans (c. US$0.4 billion for the SBM share in the bridge loan for the Sepetiba project and c. $0.5 billion under the loan for project Liza Unity) and the net cash balance of c. US$0.3 billion. Post period in July, the bridge loan for the Sepetiba project was drawn in full in order to continue to fund the FPSO construction.

Cancellation of Shares

Upon completion of the 2020 share repurchase program, in line with its reported objectives, SBM Offshore is planning to cancel 10 million shares currently held in Treasury. This represents c. 80% of the total shares repurchased. The cancellation is expected to take place before year-end.

Directional Pro-Forma Backlog

Changes in ownership scenarios and lease contract durations have the potential to significantly impact the Company’s future cash flows, net debt balance as well as the profit and loss statement. The Company therefore provides a pro-forma backlog on the basis of the most likely ownership scenarios and lease contract durations for the various projects.

The pro-forma backlog at June 30, 2020 reflects assumptions, which are in line with year-end 2019 pro-forma backlog assumptions, for more details, refer to the 2020 Half Year Management Report.

The pro-forma Directional backlog at the end of June 30, 2020 decreased by US$1 billion to a total of US$19.7 billion, compared with US$20.7 billion at December 31, 2019. The decrease was mainly the result of turnover of US$1.2 billion in the first half year of 2020 consuming backlog.

see & read more on
https://www.sbmoffshore.com/?press-release=sbm-offshore-half-year-2020-earnings

tijd 09.13
SBM EUR 14,285 +34,5ct vol. 144.296



Beperkte weergave !
Leden hebben toegang tot meer informatie! Omdat u nog geen lid bent of niet staat ingelogd, ziet u nu een beperktere pagina. Wordt daarom GRATIS Lid of login met uw wachtwoord


Copyrights © 2000 by XEA.nl all rights reserved
Niets mag zonder toestemming van de redactie worden gekopieerd, linken naar deze pagina is wel toegestaan.


Copyrights © DEBELEGGERSADVISEUR.NL