TechnipFMC’s 4Q loss deepens
Oilfield services provider TechnipFMC saw its revenue for the fourth quarter 2017 fall to $3,6 billion, a 15.9 percent compared to $4,38 billion in the fourth quarter of 2016. Net loss for the quarter deepened to $153,9 million, versus $100,6 million a year ago.
Adjusted EBITDA, which excludes charges and credits, was $573.1 million, an increase of 9 percent from the prior year despite the 16 percent decline in revenue. Adjusted EBITDA margin was 15.6 percent, an increase of 360 basis points from the prior year.
The company’s Subsea business reported fourth quarter revenue of $1,29 billion. Revenue was down 36.2 percent from the prior year, primarily due to a reduction in project activity within the Europe and Africa as well as Asia Pacific regions. Subsea revenue continues to be negatively impacted by prior period declines in inbound orders related to the market downturn, TechnipFMC said.
Vessel utilization rate for the fourth quarter was 65 percent, down from 70 percent in the third quarter and from 78 percent in the prior year.
Onshore/Offshore reported fourth quarter revenue of $2,019.5 million. Revenue declined 2 percent from the prior-year quarter. Revenue was modestly lower as the compapny neared completion of the first phase of Yamal LNG, largely offset by increased project activity in the Europe, Middle East, and Asia Pacific regions. Onshore/Offshore inbound orders for the quarter were $874.2 million.
Doug Pferdehirt, TechnipFMC CEO said he expected an increase in subsea market activity in 2018, driven by major projects “as well as a blend of small-to-mid size projects and service opportunities. We remain confident that our inbound orders will grow year-over-year and that as much as 25 percent of these orders will come from (integrated Engineering, Procurement, Construction and Installation (iEPCI™) in 2018.”
Pferdehirt expects growth in orders in the U.S. surface market: “In the North American surface market, we see increased activity in unconventional resources, driven by further improvement in rig count and increased frac intensity. In 2018, we believe that revenues for our North American business will begin to approach the levels we achieved at the cycle peak in 2014. We also expect international markets will return to growth in 2018, although at a more moderate pace than North America. The Middle East, Asia Pacific, and Europe are positioned for the strongest growth.”
Pferdehirt concluded, “We will balance investment for growth against returning capital to our investors and will continue the dividend and share repurchase activity we initiated last year. Our strong execution performance and market acceptance of our integrated business model and new technologies, combined with our continued focus on cost and efficiency, positions us well to deliver strong performance in 2018.”