The Netherlands: SBM Offshore Posts 2010 Net Profit of USD 276 Million. 20 pct Increase from 2009

SBM Offshore’s consolidated result for 2010 is a net profit of US$ 276.0 million, a 20.0% increase in comparison with the 2009 net profit of US$ 230.0 million. This result includes non recurring items which generated a net gain of US$ 9.0 million in 2010 (US$ 32.4 million in 2009). Net profit attributable to shareholders amounts to US$ 240.0 million (US$ 221.0 million in 2009).

Earnings per share amounted to US$ 1.44, which is 2.0% below the level of US$ 1.47 in 2009. EPS did not increase in line with net profit due to the larger portion of net profit attributable to minority interests and due to a higher average number of shares. Proposed dividend per share is US$ 0.71, representing the Company’s normal pay-out ratio of 50% of net profit.

New orders in the year totalled US$ 4,532 million (split 43% / 51% / 6% between the Lease and Operate, the Turnkey Systems and the Turnkey Services segments respectively), compared to US$ 3,740 million of new orders  in 2009.

Turnover increased by 3.4% to US$ 3,056 million, in comparison with US$ 2,957 million in 2009, mainly as a result of higher Turnkey Systems revenues.

Total order portfolio at the end of the year was US$ 11,502 million compared to US$ 10,032 million at the end of 2009, an increase of 14.7% and a new record. Of this, 78% or US$ 9,003 million relates to the nondiscounted value of the revenues from the Company’s long-term lease contracts in portfolio at year-end. Operating profit (EBIT) increased by 23.5% to US$ 362.4 million compared with US$ 293.4 million in 2009. EBIT margin increased to 11.9% compared to 9.9% in 2009 while the net profit margin rose to 9.0% (7.8% in 2009). The relative contributions to EBIT from the three segments were 37% from Lease and Operate, 47% from Turnkey Systems and 16% from Turnkey Services. In 2009 the corresponding split was 54% : 30% : 16%. Segmental EBIT margins were for Lease and Operate 18.3% (2009: 21.4%), Turnkey Systems 9.4% (2009: 5.0%) and Turnkey Services 18.9% (2009: 20.3%) including intercompany projects.

EBITDA amounted to US$ 688.4 million, a 12.2% increase compared to US$ 613.3 million in 2009.

Tony Mace, CEO of SBM Offshore: “We are pleased to announce financial results showing a strong increase in profit compared to last year and an improved EBIT margin specifically in the Turnkey Systems segment. The Company delivered several major projects throughout the year. The Company’s fleet of leased vessels has again performed very well generating substantial bonus revenues. Order intake has been satisfactory, and has led to a new record order portfolio at year-end and the Company is well positioned for a number of new order prospects in 2011. The expanded 5-year revolving credit facility, new project financing facility for FPSO Aseng and the recently announced financial partnership with Mitsubishi Corporation all strengthen the Company’s financing capacity and objective to grow the fleet of leased units”.

The year was marked by the following highlights:

• a Letter of Intent for one major new order in the first half of the year (FPSO Cidade de Paraty finance lease), plus a Letter of Agreement for the Tubular Bells project, several lease extensions, variation orders, and various smaller projects;

• the sale of 20% of the Company’s stake in the Paenal construction yard to DSME resulting in a nonrecurring reduction of net financing costs of US$ 9.0 million;

• first oil from two major projects for Petrobras, the FPSO Capixaba relocation to the Cachalote field, and the FPSO P-57 turnkey delivery and start of the 3-year operating contract;

• much higher contribution from the Turnkey Systems segment, as the good results generated from the more recent projects (including those projects accounted for as finance leases) become more predominant, and despite some further schedule and cost increases on the drilling rigs series and heavy lift crane project;

• the performance of the Lease & Operate fleet in operation in 2010 exceeded expectations, although the year was negatively impacted by impairment charges of US$ 30.8 million related to the Yme MOPUstor™, and US$ 19.9 million incurred on the tanker inventory which was laid-up for the year. The MOPUstor™ impairment resulted from additional costs. The tanker inventory impairment reduces the carrying values of two tankers (Navajo Spirit and Ballina) to market value;

• Capital expenditure in 2010 amounted to US$ 519 million, which is lower than in 2009 (US$ 656 million) but excludes investments in two leases which are accounted for as finance leases and accordingly are not reported as property, plant and equipment but under construction contracts;

• new project finance facilities of US$ 602 million for FPSO Aseng and a new, expanded 5-year Revolving Credit Facility of US$ 750 million.

About SBM Offshore

SBM Offshore N.V., formerly IHC Caland N.V., is the management holding company of a group of international companies, working as suppliers to the offshore oil and gas industry on a global basis. The Company has been listed on the Amsterdam Stock Exchange since 1965 and has been included in the AEX index since March 2003 . The Company started its offshore activities in the early 1950’s and subsequently became a pioneer in Single Point Mooring (SPM) systems, dynamically positioned drilling vessels, jack-up drilling rigs, and heavy offshore cranes.

SBM Offshore’s present activities include the engineering, supply, and offshore installation of SPM systems for offshore loading and unloading of vessels or the permanent mooring of offshore oil production and/or storage vessels, as well as the turnkey supply of complete floating facilities for the production, storage, and export of crude oil and gas. The latter comprise Floating Production Storage and Offloading systems (FPSOs), Floating Storage and Offloading systems (FSOs), Tension Leg Platforms (TLPs), Floating Production Units (FPUs) of all types, including both monohull and semi-submersible, as well as self-elevating, Mobile Offshore Production Units (MOPUs).

In addition to the supply of systems on a turnkey basis, the Company is also in the business of owning and operating the above mentioned Floating Production and/or Storage and Offloading systems. These units are contracted on long-term charters, always including their operation, to oil companies in various parts of the world. Besides being the initiator of this concept, the Company is also the largest player.

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Source:SBMOffshore, March  4, 2011;