The Netherlands: SBM Offshore N.V. Half-Year Results 2010
• Turnover for the half-year at US$ 1.4 billion (H1 2009: US$ 1.4 billion);
• EBIT increased by 14% compared to H1 2009;
• Net profit for the half-year at US$ 92.5 million (H1 2009: US$ 95.5 million) includes a non-cash US$ 21
million mark to market hedging loss;
• Total order backlog at 30 June 2010 at US$ 10.9 billion (H1 2009: US$ 8.2 billion);
• A new five year revolving credit facility increased to US$ 750 million;
• Letter of Intent from Petrobras for a 20 year lease of the FPSO Cidade de Paraty for the Tupi Nordeste
field in Brazil.
Tony Mace, CEO of SBM Offshore: “The first half of 2010 has seen some important new orders, continuing robust performance of the SBM Offshore fleet, and progress on ongoing projects. The results during this period reflect a sound performance by the Company, with a new record order backlog. The market for new projects has been increasing as expected, and although the long term impact of the Macondo accident in the Gulf of Mexico is uncertain, we remain optimistic that the market conditions will allow continued growth of the Company.”
Outlook Full Year 2010
• Turnover in the same range as 2009; fully secured by current backlog;
• EBIT margin from Turnkey Systems solidly within 5%-10% range;
• EBIT margin from Turnkey Services within 15%-20% range;
• Lease and Operate EBIT contribution below 2009 level.
The profit after tax for SBM Offshore N.V. for the first six months of 2010 was US$ 92.5 million (US$ 0.47 per share) compared with US$ 95.5 million (US$ 0.62 per share) at half-year 2009.
Net profit includes a non-cash mark to market loss of US$ 21 million on the interest rate swap entered into in 2007 relating to the financing of the Deep Panuke platform. Part of this hedge relationship has become ineffective under IAS 39 rules obliging the Company to recognise the negative market value at 30 June 2010 within the net financing costs in the consolidated income statement rather than directly to equity.
In 2009 non-recurring items amounted to a net loss of US$ 7 million, being a US$ 32 million post-tax gain on the sale of the Turkmenistan MOPU/FSO (Turnkey Systems segment) and a US$ 39 million impairment on the MOPUstorTM for Talisman’s Yme field (Lease and Operate segment).
Consolidated turnover for the first six months of 2010 was US$ 1,378.4 million compared with US$ 1,435.3 million for half-year 2009. Turnkey Systems represents 63%, Turnkey Services represents 9% and Lease and Operate represents 28%, which was also the case in 2009.
EBITDA for the first six months of 2010 was US$ 293.5 million (US$ 1.77 per share) compared with US$ 291.5 million (US$ 1.99 per share) at half-year 2009. EBIT for the first six months of 2010 was US$ 146.0 million (US$ 0.88 per share) compared with US$ 128.3 million (US$ 0.88 per share) at half-year 2009. Within the Turnkey Systems segment, significant charges were recorded to establish provisions for the forecasted completion of the three drilling rigs and for a heavy lift crane project.
Segmental EBIT margins for the first six months of 2010 are from Lease and Operate 22.0% compared to 17.6% at mid-year 2009; from Turnkey Systems at 5.7% compared to 3.3% at mid-year 2009 and for Turnkey Services at 20.8% (of total segment turnover including intercompany) compared to 26.3% for halfyear
2009. Net debt at 30 June 2010 amounted to US$ 1,763 million (31 March 2010 amounted to US$ 1,606 million), with cash and cash equivalent balances of US$ 177 million and committed, undrawn, long-term bank facilities of US$ 540 million. Net gearing amounts to 102%, higher than year end 2009 (81%) due largely to the timing of turnkey project milestone payments and the reduction in market value of the foreign exchange
and interest rate hedge portfolio. Net debt to EBITDA on a rolling 12 month basis at 30 June 2010 amounted to 2.87 compared with 2.39 at 31 December 2009. All banking covenants were comfortably met.
The Company completed the refinancing and expansion of its existing revolving credit facility of US$ 500 million to a new US$ 750 million facility. The targeted syndication to a select group of banks found very
strong interest and led to a substantial oversubscription. The margin over Libor is variable, depending upon a Net Debt / EBITDA grid which has a minimum level of 95 bps and maximum of 190 bps.
Capital expenditure in the first six month of 2010 amounted to US$ 283 million (US$ 355 million for halfyear 2009). Order intake for the first six months amounted to US$ 2,279 million. Backlog at 30 June 2010 totals US$
10.9 billion of which approximately US$ 1.6 billion is expected to be executed in the remainder of 2010 and approximately US$ 1.9 billion in 2011.
Source: sbm, August 18, 2010;