SBM Offshore posts higher 1Q revenue

Dutch FPSO specialist SBM Offshore has reported a rise in directional revenue for the first quarter of 2019, boosted by the turnkey segment of the business.

SBM Offshore CEO Bruno Chabas / Image source: SBM Offshore
SBM Offshore CEO Bruno Chabas / Image source: SBM Offshore

The company reported directional revenue of $456 million for the quarter, up from $385 million in the corresponding quarter a year ago.

SBM Offshore said that the 18 percent or $71 million increase in revenue was caused by Turnkey segment which benefited from a continued increase in activity stressing in particular progress made on the Johan Castberg turret project being built for Equinor.

First quarter revenues in Lease and Operate segment decreased by 6 percent or $20 million in the first quarter of 2019 compared with the same period last year.
This decrease was caused by vessels that left the fleet during 2018 – FPSO Turritella, FSO Yetagun, and FSO N’Kossa II – SBM Offshore said.

SBM Offshore’s directional revenue guidance for the full year is maintained at around US$2 billion of revenues, with around US$1.3 billion coming from Lease and Operate and around US$0.7 billion from the Turnkey segment, while 2019 Directional EBITDA guidance is maintained at around US$750 million.

The company has also confirmed that the construction of the Liza Destiny FPSO is almost complete, as reported earlier. The FPSO converted from a VLCC will be deployed in Guyana as at Exxon’s Liza oil field.

Bruno Chabas, CEO of SBM Offshore, commented: “SBM Offshore’s performance over the first quarter of 2019 has been on target and our guidance for the full year remains unchanged. Our operations continue to demonstrate strong performance and our projects under construction are progressing as expected and to the satisfaction of our clients. FPSO Liza Destiny entered the final phase of construction and commissioning at the yard in Singapore.”

Chabas also commented on the second FPSO Exxon has ordered from SBM Offshore for the second phase of the Liza Field. Worth noting, unlike the Liza Destiny, which was converted from a VLCC, this FPSO will be built under SBM’s Fast4Ward program.

Fast4Ward is a program which includes a standardized FPSO designed to speed up the time to the market, as it is based on a built-to-stock FPSO hull. The FPSO ordered this month will be named Liza Unity, and is SBM Offshore’s first unit delivered under the Fast4Ward program.

Chabas said on Thursday: “As regards new orders, with the award of the second FPSO for the Liza project in Guyana, Liza Unity, SBM Offshore’s Fast4Ward™ philosophy has moved from plan to reality, with the first standard hull now allocated. Construction of this hull is progressing according to plan, with the major steel structure now in dry-dock. The project will see several standard topsides being adopted from our catalogue.

“Driven by ongoing client capital discipline, the offshore industry upturn remains concentrated on very large, high quality field developments, which benefit most from our Fast4Ward™ concept. As clients mature their conceptual designs, our visibility of future opportunities continues to improve. In anticipation of this upturn, SBM Offshore ordered the third Fast4Ward™ hull from a second yard.”

“The fact that Fast4Ward™ is now very much a reality, combined with our efficient financing model and organization, means that our growth engine, Turnkey, is well positioned to increase cash flow and value.”

Offshore Energy Today Staff

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