SBM Offshore

22 May 2018Reading time: 2 minutes
SBM Offshore is a Dutch company providing floating production solution to the offshore energy industry and has unrivalled experience in this field. The company is headquartered in Amsterdam and employ approximatively 4,800 people. The company is subsidised in the Turnkey and the Lease & Operate branch. The turnkey branch sale build vessels for outright sales, while lease & operate provide long-term leasing of the installation to clients.

According to the 2017 full year earnings report, SBM had a solid year in a remaining tumultuous Oil & Gas environment. EBITDA increased by roughly 4% to US$806 million compared to FY2016. This increase is mainly driven by the Lease &a Operate segment. The Turnkey segment generate a loss of US$86 million, which was according to management better than expected. However, the revenue of the company decreased by 17% to US$1,676 million for FY2017 compared to the year before.

A key approach to success of SBM Offshore is to optimize offshore project, in order to make them economically viable to clients by lowering break-even price. The latter can be reached by ensure reliable delivery and short time laps between installation and first oil output, so Bruno Chabas CEO of SBM Offshore. The company is the Fas4tWardTM project, which is a project leading to standardization of FSPO ( Floating Production Storage and Offloading vessels). This revolutionary measure will reduce cost in a difficult oil market and might generate more earnings when the energy market will be booming again.

According to SBM Offshore’s management, deep water oil and gas market is expected to recover. The recent political downturn in the Middle East, which might lead to higher oil prices and the growing confidence of clients to invest in expensive offshore project could boost this activity in the coming years. However the future development remains to be seen.

A majority of analyst give the stock a Buy advice. At this moment the share is traded for approximately EUR 14.60 (18.05.2018), the-high stock price in 2018 was (EUR 15.56). The future price of the share is subject to several political, industrial and sector specific as well as economic factors. Investors should consider such risk when making their investment decisions. Developments can be different at any time than investors expect, which can result in capital losses.

Vontobel products on SBM Offshore are tradable at DEGIRO.

Important legal information:

This information does not constitute a financial analysis, but product advertisement. Thus it does not meet the legal requirements to ensure the impartiality of financial analysis and is not subject to trade prohibition before the publication of a financial analysis.

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Frankfurt am Main, Germany.

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02/03/2021 09:53:04