February 29, 2024
Record-level Revenue and EBITDA, increasing total shareholder returns
Highlights
- Record-level Directional1 Revenue of US$4.5 billion (+38%), above guidance
- Record-level Directional EBITDA of US$1.3 billion (+31%), in line with guidance
- US$30.3 billion Directional backlog; US$9.3 billion or EUR46.6/share2 Directional net cash from L&O and BOT3 backlog4
- Evolving shareholder return policy: flexibility to pay committed annual cash return via dividend and share repurchase
- 12% increase in annual cash return to shareholders of US$220 million
- Cash return composed of US$150 million proposed dividend and EUR65 million (US$70 million equiv.5) share repurchase
- 2024 Directional Revenue guidance of around US$3.5 billion
- 2024 Directional EBITDA guidance of around US$1.2 billion
- Successful sale of FPSO Liza Unity, Whiptail FEED award, 10-year OMEA for Guyana FPSO fleet, and FPSOs Prosperity & Sepetiba 1st oil
- 70% FPSO CO2 emissions reduction potential from CO2 capture solution offered in partnership with MHI
SBM Offshore's 2023 Annual Report can be found on its website under: https://2023.annualreport.sbmoffshore.com/
Bruno Chabas, CEO of SBM Offshore, commented:
"In 2023, we delivered record level financial performance and maintained our future backlog at more than US$30 billion. We expect to generate US$9.3 billion net cash from the Lease and Operate ("L&O") and Build-Operate-Transfer ("BOT") sales components of this backlog, equivalent to EUR46.6/share6. Over the past 5 years we have grown this backlog of future net cash by US$2.9 billion whilst at the same time returning US$1.3 billion to shareholders.
This performance reflects the uniquely recognized competitive positioning of SBM Offshore, the resilience of our business model and strong organizational capability to execute our strategy. In 2023, we delivered and commissioned two large FPSOs in industry-leading timeframes, adding significant value for our clients. The gross margin for our portfolio of construction projects remained robust. The 10-year Operations and Maintenance Enabling Agreement ("OMEA") in Guyana establishes a new benchmark which can be applied to other clients, demonstrating our ability to develop new models and respond to the dynamics of an evolving financing market. On the financing front, we raised US$3.2 billion for two FPSO projects, securing the financing of the entire construction portfolio.
We have a positive outlook on the market given the economics and low emission qualities of deepwater resources. We have secured the FEED award and reserved an MPF hull for FPSO Jaguar for the Whiptail project in Guyana. The carbon capture solution developed in partnership with Mitsubishi Heavy Industries, Ltd. ("MHI") aims to reduce FPSO emissions by up to 70%. As a result, we are on target to offer a near zero emission FPSO to the market in 2025, a key enabler of our 2050 net zero ambition.
Our expertise in traditional oil and gas deepwater floating systems can be applied to alternative energies such as floating offshore wind, hydrogen and ammonia. The Provence Grand Large windfarm, where three 8.4 MW floating wind units were successfully installed in October, is a testament to our capacity to make innovative ideas come true and contribute to the energy transition. We will pace our activities in alternative energies in line with market developments, remaining selective and disciplined.
Our strong financial and operational performance and the positive outlook for our business through the energy transition and beyond seem to be under-appreciated by the market. This is the catalyst for the evolution of our shareholder returns policy: we are introducing flexibility to pay our annual committed fixed cash return via share repurchase in combination with dividend. Based on this we are increasing our fixed cash return by 12% to US$1.22 per share to be paid US$0.83 per share in dividend7 and US$0.39 per share via share repurchase8.
It has been a huge privilege to serve the Company as CEO for the last 12 years. I have had the honor of leading a team of talented, dedicated and passionate people in transforming SBM Offshore. Today, the Group has a well-established vision, purpose, and structure with a recognized leading market position and strong growth prospects in the industry. I am especially proud that SBM Offshore has a leadership team which makes an internal succession possible and am extremely pleased to hand over my responsibilities to Øivind Tangen and a talented team of SBMers. Øivind will successfully guide the Company to achieve its ambitious energy transition targets by focusing on the Company strengths."
Financial Overview9
Directional | IFRS | |||||||
in US$ million | FY 2023 | FY 2022 | % Change | FY 2023 | FY 2022 | % Change | ||
Revenue | 4,532 | 3,288 | 38% | 4,963 | 4,913 | 1% | ||
Lease and Operate | 1,954 | 1,763 | 11% | 1,563 | 1,414 | 11% | ||
Turnkey | 2,578 | 1,525 | 69% | 3,400 | 3,499 | -3% | ||
EBITDA | 1,319 | 1,010 | 31% | 1,239 | 1,209 | 3% | ||
Lease and Operate | 1,124 | 1,080 | 4% | 695 | 719 | -3% | ||
Turnkey | 296 | 7 | >500% | 646 | 569 | 14% | ||
Other | (101) | (77) | -31% | (101) | (80) | -26% | ||
Profit attributable to Shareholders | 524 | 115 | 354% | 491 | 450 | 9% | ||
Earnings per share (US$ per share) | 2.92 | 0.65 | 350% | 2.74 | 2.53 | 8% | ||
in US$ billion | FY 2023 | FY 2022 | % Change | FY 2023 | FY 2022 | % Change | ||
Pro-forma Backlog | 30.3 | 30.5 | -1% | - | - | - | ||
Net Debt | 6.7 | 6.1 | 10% | 8.7 | 7.9 | 10% |
Directional revenue for 2023 stood at US$4,532 million, a 38% increase when compared with 2022, primarily attributable ...