SBM Offshore (SBMO) Q3 2024 TU earnings summary

Executive summary

• EBITDA guidance for 2024 raised from $1.3 billion to $1.9 billion, a 46% increase, driven by FPSO Prosperity sale, expected FPSO Liza Destiny sale, and strong operational performance, with continued O&M agreements.

• Directional revenue guidance for 2024 increased from above $3.8 billion to above $6.0 billion, up 58%.

• Award of the FPSO contract for the GranMorgu project in Suriname with TotalEnergies, in partnership with Technip Energies, highlights market positioning and emission reduction focus.

• Four FPSO projects under construction are progressing on schedule, with key milestones for FPSO Almirante Tamandaré, Alexandre de Gusmão, One Guyana, and Jaguar.

• Share repurchase program of €130 million is 57% complete, aiming to reduce share capital and support employee programs.

Financial highlights

• Year-to-date directional revenue reached $2.838 billion, a 28% increase compared to the same period in 2023, driven by both lease and operate and turnkey segments.

• Lease and Operate revenue for Q3 2024 was $1.01 billion, up 28% year-over-year, mainly due to new FPSOs joining the fleet and increased reimbursable activities.

• Turnkey revenue improved to $1.036 billion in Q3 2024 from $835 million in Q3 2023, supported by new project awards and increased brownfield activities.

• Directional net debt rose by $603 million to $7.258 billion at the end of September 2024, reflecting investments in growth projects.

• Net cash proceeds from FPSO sales will be used to fully repay $405 million and $979 million in project financing, reducing net debt.

Outlook and guidance

• Directional revenue guidance increased to above $6 billion and EBITDA to around $1.9 billion for 2024, reflecting strong project execution and asset sales.

• Lease and Operate revenue expected above $2.3 billion and Turnkey above $3.7 billion for 2024.

• Strong project pipeline expected over the next three to five years, with opportunities in emerging markets such as Namibia, Suriname, Brazil, and Guyana.