Dutch oil and gas services firm SBM Offshore's annual revenue jumped 35% to a record high in 2024, driven by the sale of its floating production, storage and offloading vessels (FPSO) in Suriname and Guyana, the company said on Thursday.
SBM Offshore's shares rose 9.3% to 20.04 euros at 0851 GMT, their highest in 14 years.
The company, which provides floating production solutions to the offshore energy industry, reported directional revenue at a record level of $6.1 billion for 2024, compared to $4.53 billion in 2023.
That came slightly ahead of its guidance of $6.0 billion.
"Two new awards we won, the PSO Jaguar for Exxon in Guyana and the GranMorgu FPSO in Suriname both contributed," finance chief Douglas Wood said in an interview.
The group attributed the strong performance to its turnkey business, which builds and sells the FPSO vessels and represented 61% of total directional revenue in 2024, up from 57% last year.
"We expect to see turnkey's overall role to increase in the financials," the CFO said.
This is in part driven by an increased client interest in the sale-and-operate model where clients finance the vessels during construction, allowing them to be accounted for like an engineering procurement and construction project, Doug said.
"With a growing customer preference to own their FPSOs, SBM has great opportunities to monetize this value," Degroof Petercam analysts said in a note.
"The 2025 guidance shows that profits can grow further," the broker added.
SBM Offshore calculates its results using a method of directional reporting that records payments made during the construction phase and prior to a lease's execution as revenue.
The Amsterdam-based group sees 2025 directional revenue guidance above $4.9 billion, with around $2.7 billion from its turnkey business, which builds and sells the FPSO vessels.
"We project that, by the end of the year 2025, Fast4Ward FPSOs will account for 12% of the world deep water production," CEO Øivind Tangen said in an interview.
The group's directional backlog, or contracts it expects to complete, increased 16% to a total of $35.1 billion, driven by three new awards.
SBM raised its cash returns to shareholders by 30% to $1.59 per share for 2024.
($1 = 0.9580 euros)
(Reuters - Reporting by Dimitri Rhodes and Johan Bodinier; Editing by Mrigank Dhaniwala)