SBM reports increased earnings despite 11% drop in revenue

Dutch engineering company SBM Offshore said on Wednesday it had exceeded its first half targets due to a higher than expected investment in its deep sea projects.

SBM, which builds and leases offshore drilling platforms, revised its earnings before interest, tax, depreciation and amortisation (EBITDA) projections to be just over the $750m figure it had previously given for the year after it increased its second quarter EBITDA to $453m against the $322m it posted the same time last year.

Net earnings grew from $38m in the second quarter of 2016 to $68m in the same period this year, despite a $104m fall in revenue to $835m.

For the first half of 2017, the firm reported an underlying directional earning per share (EPS) of $0.39, a 26% year-on-year improvement.

Net debt was down $100m to $3b and thanks to long term deals such as its FPSO contract with ExxonMobil for its Liza project on the Guyanan coast, the firm reiterated its 2017 guidance for directional revenue at "around $1.7b."

Bruno Chabas, chief executive of SBM Offshore, said "SBM Offshore produced solid results for the first half of 2017, not only driven by the Lease and Operate segment, but also by sound performance in closing out Turnkey projects. With the three additional FPSOs ramping up, our fleet produced repeatedly more than 1 million barrels per day, which represents more than 10% of global deep water oil production. In today's oil price environment, characterized by continued low prices, deep water field developments need to build on the competitiveness gained."

As of 1045 BST, shares had inched forward 3.35% to EUR 15.13.