Press release - SBM Offshore N.V. 19 August 2009
SBM OFFSHORE N.V. HALF-YEAR RESULTS 2009
Highlights
· Turnover for the half-year at US$ 1.4 billion (H1 2008: US$ 1.5 billion);
· Net profit for the half-year at US$ 95.5 million (H1 2008: US$ 85.3 million);
· Total order backlog at 30 June 2009 at US$ 8.2 billion (H1 2008: US$ 9.5 billion); No major new orders
in the first half;
· Commenced lease and operations on FPSO Espirito Santo and Thunder Hawk semi-submersible;
· Recent projects progressing well; Provisions taken for drilling rigs;
· Results include a non-recurring post-tax gain of US$ 32 million on sale of Turkmenistan MOPU/FSO
and an impairment of US$ 39 million on the Talisman MOPUstorTM.
Tony Mace, CEO of SBM Offshore: “The Company’s activities continue at a high level with the execution of
the large order backlog resulting in the start of production of three new facilities, the consolidation of
execution plans of the older more challenging projects and the continuation of good performance on the
newer projects. Despite the low order intake, bid activity has been high and there are serious opportunities
for securing new orders in the second half of the year. For the mid to longer term we believe that demand
for our products will be strong”.
Outlook Full Year 2009
· Management re-iterates that it expects net profit to be in the range of the 2008 level;
· Turnover is expected to be around US$ 2.9 billion;
· EBIT for Lease and Operate segment is expected to be well below 2008 level;
· EBIT margin for combined Turnkey segments is expected to be in the lower part of the 5 – 10% range
excluding the Turkmenistan transaction.
Key Figures
US$ million
H1
2009
H1
2008 Change
Turnover 1,435.3 1,497.3 - 4.1%
EBITDA 291.5 246.2 18.4%
EBIT 128.3 114.2 12.3%
Profit 95.5 85.3 12.0%
EBIT margin 8.9% 7.6% 17.1%
Investment in fixed assets 354.6 518.0 - 31.5%
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1. Half-Year Results
In accordance with IFRS 8 accounting rules for segmental reporting, the Company now provides separate
disclosure of its Turnkey Services activities, which were previously combined with the Turnkey Systems
activities. Specific allocation of Selling, General and Administrative expenses are now made to the three
reporting segments, and the 2008 comparative figures have been restated accordingly.
The profit after tax for SBM Offshore N.V. for the first six months of 2009 was US$ 95.5 million (US$ 0.62
per share) compared with US$ 85.3 million (US$ 0.58 per share) at mid-year 2008.
Net profit includes 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 Talisman MOPUstorTM for Yme (Lease and
Operate segment). In 2008, non-recurring items amounted to a net profit of US$ 24 million.
The Company’s inventory of four tankers, available for conversion into FPSOs, and one existing FPSO,
have incurred an operating loss of close to US$ 17 million in the first half of 2009 being either laid up or
idle, following the collapse of the trading market . In order to reduce costs for the remainder of the year or
until a new FPSO project is obtained the units are placed in cold lay-up conditions.
Consolidated turnover for the first six months was US$ 1,435.3 million compared with US$ 1,497.3 million
for mid year 2008. Turnkey Systems represent s 63%, Turnkey Services represents 9% and Lease and
Operate represents 28% of total third-party turnover.
EBITDA for the six months was US$ 291.5 million (US$ 1.99 per share) compared with US$ 246.2 million
(US$ 1.71 per share) at mid-year 2008.
EBIT for the six month period was US$ 128.3 million (US$ 0.88 per share) compared with US$ 114.2
million (US$ 0.79 per share) at mid-year 2008.
Segmental EBIT margins for the first six months of 2009 are in Lease and Operate 17.6% compared to
29.5% at mid-year 2008, as a result of the impairment on the MOPUstor™ and operating losses on the
tanker inventory ; in Turnkey Systems at 2.5% compared to - 3.2% at mid-year 2008 and for Turnkey
Services at 24.9% compared to 17.4% at mid-year 2008. Excluding the gain from the Turkmenistan
transaction the combined EBIT margin for the two Turnkey segments is 2.9%.
Net debt at 30 June 2009 amounted to US$ 1,743 million (31 March 2009 amounted to US$ 1,625 million),
with cash and cash equivalent balances of US$ 194 million and committed, undrawn, long-term bank
facilities of US$ 372 million. Net gearing amounts to 126%, higher than year end 2008 (118%) due largely
to the timing of turnkey project milestone payments.
Net debt to EBITDA at 30 June 2009 amounted to 3.03 compared with 2.76 at 31 December 2008. All
banking covenants were comfortably met.
The Company completed its US$ 350 million project loan facility to finance the construction and leasing of
the Deep Panuke Production Unit, and secured the first drawdown of US$ 200 million in late June 2009.
Capital expenditure in the first half-year of 2009 amounted to US$ 355 million (US$ 518 million for H1
2008).
No major new orders were received during the first half of 2009. Order intake amounted to US$ 364 million.
Backlog at 30 June 2009 totals US$ 8.2 billion of which approximately US$ 1. 3 billion is expected to be
executed in the remainder of 2009 and approximately US$ 1.9 billion in 2010.
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2. Market Outlook
Investments in the oil services market have in general been slow as a result of the recession with lower
demand for oil and oil related products. In the near term the Company is pursuing several opportunities and
targets to secure two new major orders before the year-end.
In the mid to long-term, the Company is confident that demand for our products will recover as there will be
a need to develop new oil and gas reservoirs. These new reservoirs are for a large part located offshore in
deep water where SBM Offshore concentrates its focus and has a solid track record. There are several
projects developing in arctic areas for which new technology is being developed. The Company is currently
working on a compensated call for tender (CCFT) for the Shtokman FPU development in the arctic region.
The offshore LNG sector is showing signs of further development with yesterday’s announcement that SBM
Offshore has signed a framework arrangement with Shell for the supply of the turret mooring systems for
Shell’s FLNG facilities. SBM/Linde continue to market their generic LNG FPSO design and expect to
undertake study work for several clients on specific offshore gas field developments.
As expected, order intake is low for the supply of specialised equipment for drilling rigs, such as jack up
systems, as well as design licenses for new drilling rigs, as several projects have been cancelled
worldwide.
In the offshore services market, activity in general has reduced but the Company’s Turnkey Services
segment is maintaining a good level of activity with orders for small mooring systems, spare parts and
contracting services.
3. Portfolio Development
Development of the order backlog shows a decrease of 13.7% to US$ 8.2 billion at 30 June 2009 compared
to US$ 9.5 billion at 30 June 2008. This is the result of low order intake for the last six months and natural
decline and changes in the portfolio of the Lease and Operate segment.
Order intake for the fi rst half of 2009 totalled US$ 364 million, of which a