FMC Technologies reported a 15% increase in revenues and its highest quarterly subsea margins in four years, thanks to its Subsea Technologies division.
Subsea Technologies saw a 16% increase in Q3 revenue, at US$1.3 billion, compared to the previous quarter. Operating profit increased 69% from the prior-year quarter to $204 million, primarily as a result of better execution on higher volumes in all regions, and growth in the subsea service revenue. Total Q3 revenues were $2.0 billion, up 15%.
The figures were released as the industry looks to address increasing costs, including in the subsea sector. According to Statoil’s Benedicte Nordang, project manager on the Johan Castberg development, subsea production system costs have tripled in since 2003. Subsea costs overall have almost doubled, she told delegates at an event in Aberdeen last week.
Douglas-Westwood has forecast global subsea hardware Capex to total $117 billion in 2014-2018. This represents growth of more than 80% compared with the preceding five-year period. In 2013, subsea tree installations were lower than expected with delays in crucial projects off Brazil and West Africa. However, DW predicts an increase through to 2018, with major manufacturers reporting strong backlogs.
"Quarterly subsea margins are at the highest level we have delivered in over four years," said John Gremp, Chairman, President and CEO of FMC Technologies. "Our focus on execution, the strength of our backlog, and the growth of our subsea service revenue has positioned us to continue delivering mid-teen level margins."
New orders amounted to $1.7 billion, with $1.1 billion in Subsea Technologies orders. The Subsea Technologies backlog now stands at $5.9 billion.
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