SBM OFFSHORE THIRD QUARTER TRADING UPDATE
(Thomson Reuters ONE) -
November 8, 2017
REVENUE ON TRACK; GUIDANCE REITERATED
Highlights
* Year-to-date 2017 Directional[1] revenue in line with management
expectations at US$1,254 million
* Reiterating 2017 Directional revenue guidance of around US$1.7 billion and
underlying Directional EBITDA guidance of above US$750 million
* Update of the provision for onerous contract related to the DSCV SBM
Installer long term charter at a cost of c. US$30 million
* Full impairment of net investment in the construction yard Paenal in Angola
at a cost of c. US$30 million
* As announced on November 6, 2017 provision of US$238 million based on
advanced discussions with the U.S. Department of Justice ("DoJ") in relation
to their reopened investigation into legacy issues and Unaoil
Bruno Chabas, CEO of SBM Offshore commented:
"During the past difficult few years, SBM Offshore's teams have continued to
deliver for our clients. This has led to solid year-to-date operational
performance in both Lease and Operate as well as in Turnkey. The prospect of
closure with the DoJ is a significant step in settling our legacy issues,
however the process to reach a resolution in Brazil remains complex. While we
are continuing to work to reach an acceptable conclusion for these historical
issues, it is important to note that since 2012, the Company has fundamentally
changed by improving its ways of working and changing the business model.
As we focus on the future, these new foundations are allowing us to successfully
leverage our industry leading experience to deliver technology-driven solutions
that can transform the industry. Our recent decision to proceed with the order
of the first Fast4Ward(TM) hull demonstrates this fact. Further based on our
confidence that our experience and products can help make deepwater competitive,
even in a lower oil price environment, we have invested in retaining core
competence and experience through the cycle. Combining this with our balance
sheet position, we are well positioned to benefit from the gradual recovery in
the market that is proceeding in line with our earlier expectations. This is
evidenced by the award of FPSO Liza and increasing Turnkey activity."
Financial Highlights
Year-to-date 2017 Directional revenue came in at US$1,254 million compared to
US$1,574 million for the same period last year. This represents a decrease of
20%, caused by lower activity in Turnkey as three major projects were delivered
in 2016. The decrease in Turnkey revenue is partially offset by an increase in
revenues from the Lease and Operate segment. This increase is driven by the
addition of the three Floating, Production, Storage and Offloading vessels
(FPSOs) to the fleet during 2016 which contributed in full during the period.
Under Directional reporting, Turnkey activity is booked as capital expenditure
adding to property, plant and equipment for the portion of the asset which is
built for own account. At present, FPSO Liza is 100% owned by SBM Offshore and
as such did not contribute to the Company's revenue line during the period.
Compared to year-end 2016, directional net debt as of September 30, 2017
decreased by c. US$400 million to c. US$2.6 billion, due to positive operating
cash flow from Lease and Operate and cash received under the Yme settlement.
Part of the Yme settlement monies are required to be used to reimburse legal
fees and other claim related expenses incurred to date. The remainder of the
settlement monies will be equally distributed between SBM Offshore and project
partner Repsol in accordance with the terms of a Settlement Agreement made on
March 11, 2013 which concluded the Yme project.
SBM Offshore continues to pursue its claim against all remaining insurers
including the two excess layers, with trial proceedings scheduled to commence
October 2018.
Compliance Update
In a separate press release dated November 6, 2017 the Company provided an
update on its compliance-related legacy issues in the United States and Brazil.
A summary is provided below, however, for further information and detail,
reference is made to this separate release.
United States
The Company is in advanced discussions with the United States DoJ concerning a
potential resolution of the DoJ's investigation that the DoJ had closed in 2014
and reopened in 2016 and its inquiry into the Company's relationship with
Unaoil. Based on these investigations and the applicable U.S. statutory rules,
the DoJ has concluded that the evidence not only supports jurisdiction in the
United States but also requires a further penalty in the Unites States.
Confronted with the DoJ's conclusions and in anticipation of a final resolution,
the Company has made a provision of US$238 million.
The proposed terms under discussion reflect confidence in the quality of the
Company's compliance program and efforts by current management.
Final resolution with the DoJ remains subject to, amongst other matters,
agreement on the terms and conditions of the resolution, including subsequent
approval thereof by the Company's Supervisory Board.
Brazil
The discussions relating to the leniency agreement which was signed on July
16, 2016 but which was ultimately sent back for adjustment to the Public
Prosecutor by the Brazilian Fifth Chamber for Coordination and Review and Anti-
corruption are complex. It has transpired that two leniency agreements are now
required which necessitate agreement and coordination among the multiple parties
involved. Consequently, a resolution has not yet been reached.
The Company confirms its commitment to close out its legacy issues in Brazil and
its willingness in principle to pay the previously agreed substantial amounts.
However, to enter into the proposed leniency agreements, the Company would need
to be in a position to reach satisfactory closure with all Brazilian authorities
and Petrobras on all outstanding leniency issues at the same time. In view of
the current situation, the Company cannot guarantee that a satisfactory
resolution will be reached. The Company will await resolution before
participating in Petrobras-operated tenders.
Impairment Review
The following non-cash adjustments to the accounts are the result of SBM
Offshore's regular review as part of its planning process.
Because offshore oil and gas industry conditions continue to be challenging, SBM
Offshore expects a reduced utilization of its Diving Support and Construction
Vessel (DSCV) SBM Installer. As a result, the contract continues to be
classified as onerous and the non-cash provision is to be increased by c. US$30
million, to be recognized in the Gross Margin of the Turnkey segment. SBM
Offshore's investment (25% ownership) in the Joint Venture which owns the vessel
is consolidated using equity accounting.
As the activity outlook for the Paenal construction yard operating in Angola has
continued to deteriorate, SBM Offshore's investment in the Joint Venture owning
the Paenal construction yard (30% ownership) is to be fully impaired to a net
book value of zero, resulting in an additional impairment charge of c. US$30
million. Because this investment is consolidated using the equity method, this
non-cash impairment is to be recognized in the Company's consolidated income
statement on the line item share of profit of equity-accounted investees.
Project Review
FPSO Liza
An agreement with Keppel Shipyard Ltd (Keppel Shipyard) was signed for the
conversion of a Very Large Crude Carrier (VLCC) into an FPSO for the Liza
project offshore Guyana, operated by an ExxonMobil affiliate. The shipyard's
work scope includes refurbishment and life extension works, such as the
upgrading of living quarters, fabrication and installation of spread mooring
systems, as well as the installation and integration of topside modules. The
VLCC is scheduled to arrive at the shipyard in November 2017 with vessel related
work scope planned to commence by the end of this year.
Operational update
SBM Offshore continued to improve its safety performance with a Reported Total
Recordable Injury Frequency Rate (TRIFR) below its 2017 target of 0.32.
The Lease and Operate fleet uptime performance year-to-date was 98.5% compared
to 96.4% for the year 2016.
Dow Jones Sustainability Index ("DJSI")
On September 11, 2017, for the eighth consecutive year, SBM Offshore was
included as an index component of the DJSI (Energy Equipment & Services
industry).
Outlook and Guidance
The Company is reiterating its 2017 Directional revenue guidance of around
US$1.7 billion, of which around US$1.5 billion is expected in the Lease and
Operate segment and around US$200 million in the Turnkey segment. The Company
also reiterates its underlying Directional EBITDA guidance of above US$750
million.
The accounting for the Turritella sale will impact both 2017 and 2018
Directional accounts. The partner compensation and costs relating to the
unwinding of the loan and hedge will be booked in 2017. The former will impact
EBITDA, the latter net financing cost. The net gain on disposal will be booked
in 2018, impacting EBITDA.
Underlying 2017 Directional EBITDA guidance excludes impacts relating to the
non-cash provision relating to the SBM Installer charter contract, one-off
elements of the Yme settlement, the partner compensation booked on the sale of
FPSO Turritella and the provision for US DoJ settlement. These impacts are
currently estimated to have an aggregate impact on EBITDA in excess of US$200
million.
Conference Call
SBM Offshore has scheduled a conference call followed by a Q&A session at 10:00
am Central European Time on Wednesday, November 8, 2017.
The call will be hosted by Bruno Chabas (CEO), Philippe Barril (COO), Erik
Lagendijk (CGCO) and Douglas Wood (CFO). Interested parties are invited to
listen to the call by dialing +31 (0) 20 531 5851 in the Netherlands, +44 (0)
20 3365 3210 in the UK or +1 866 349 6093 in the US.
A replay will be available shortly after the end of the conference call.
Interested parties can listen to the replay by dialing +31 (0) 20 530 0220 and
using access code 126152# until December 8, 2017.
Corporate Profile
SBM Offshore N.V. is a listed holding company that is headquartered in
Amsterdam. It holds direct and indirect interests in other companies that
collectively with SBM Offshore N.V. form the SBM Offshore group ("the Company").
SBM Offshore provides floating production solutions to the offshore energy
industry, over the full product life-cycle. The Company is market leading in
leased floating production systems with multiple units currently in operation
and has unrivalled operational experience in this field. The Company's main
activities are the design, supply, installation, operation and the life
extension of Floating Production, Storage and Offloading (FPSO) vessels. These
are either owned and operated by SBM Offshore and leased to its clients or
supplied on a turnkey sale basis.
As of December 31, 2016, Group companies employ approximately 4,750 people
worldwide. Full time company employees totaling c. 4,250 are spread over five
regional centers, ten operational shore bases and the offshore fleet of vessels.
A further 500 are working for the joint ventures with several construction
yards. For further information, please visit our website at www.sbmoffshore.com.
The companies in which SBM Offshore N.V. directly and indirectly owns
investments are separate entities. In this communication "SBM Offshore" is
sometimes used for convenience where references are made to SBM Offshore N.V.
and its subsidiaries in general, or where no useful purpose is served by
identifying the particular company or companies.
The Management Board
Amsterdam, the Netherlands, November 8, 2017
+-----------------------------------------+-------------+------+
| Financial Calendar | Date | Year |
+-----------------------------------------+-------------+------+
| Full-Year 2017 Earnings - Press Release | February 8 | 2018 |
+-----------------------------------------+-------------+------+
| Annual General Meeting of Shareholders | April 11 | 2018 |
+-----------------------------------------+-------------+------+
| Trading Update 1Q 2018 - Press Release | May 9 | 2018 |
+-----------------------------------------+-------------+------+
| Half-Year 2018 Earnings - Press Release | August 9 | 2018 |
+-----------------------------------------+-------------+------+
| Trading Update 3Q 2018 - Press Release | November 15 | 2018 |
+-----------------------------------------+-------------+------+
Note: date in bold was changed from May 10, 2017 before market opening to May
9, 2017 after market close to accommodate Ascension Day
For further information, please contact:
Investor Relations
Bert-Jaap Dijkstra
Investor Relations Director
Mobile NL: +31 (0) 6 2114 1017
Mobile MC: +33 (0) 6 4391 9302
Telephone: +31 20 236 3222
E-mail: bertjaap.dijkstra(at)sbmoffshore.com
Website: www.sbmoffshore.com
Media Relations
Vincent Kempkes
Group Communications Director
Telephone: +31 (0) 20 2363 170
Mobile: +31 (0) 6 25 68 71 67
E-mail: vincent.kempkes(at)sbmoffshore.com
Website: www.sbmoffshore.com
Disclaimer
This press release contains inside information within the meaning of Article
7(1) of the EU Market Abuse Regulation. Some of the statements contained in
this release that are not historical facts are statements of future expectations
and other forward-looking statements based on management's current views and
assumptions and involve known and unknown risks and uncertainties that could
cause actual results, performance, or events to differ materially from those in
such statements. Such forward-looking statements are subject to various risks
and uncertainties, which may cause actual results and performance of the
Company's business to differ materially and adversely from the forward-looking
statements. Certain such forward-looking statements can be identified by the use
of forward-looking terminology such as "believes", "may", "will", "should",
"would be", "expects" or "anticipates" or similar expressions, or the negative
thereof, or other variations thereof, or comparable terminology, or by
discussions of strategy, plans, or intentions. Should one or more of these risks
or uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those described in this release as
anticipated, believed, or expected. SBM Offshore NV does not intend, and does
not assume any obligation, to update any industry information or forward-looking
statements set forth in this release to reflect subsequent events or
circumstances. Nothing in this press release shall be deemed an offer to sell,
or a solicitation of an offer to buy, any securities.
--------------------------------------------------------------------------------
[1] Directional view is a non-IFRS disclosure, which assumes all lease contracts
are classified as operating leases and all vessel joint ventures are
proportionally consolidated.
SBM OFFSHORE THIRD QUARTER TRADING UPDATE:
http://hugin.info/130754/R/2147988/823919.pdf
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The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: SBM Offshore N.V. via GlobeNewswire
Unternehmensinformation / Kurzprofil:
Datum: 08.11.2017 - 07:00 Uhr
Sprache: Deutsch
News-ID 567120
Anzahl Zeichen: 18148
contact information:
Town:
Schiedam
Kategorie:
Business News
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