SBM Offshore Upgrades Annual Revenue, Profit Outlook after ExxonMobil FPSO Sale

Liza Unity - Credit: SBM Offshore
Liza Unity - Credit: SBM Offshore

Dutch oil and gas services company SBM Offshore on Thursday upgraded its full-year revenue and core profit targets after ExxonMobil exercised its purchase option for a project in Guyana.

The Amsterdam-based company now aims for a directional revenue of $4.4 billion for 2023, against a previous forecast of above $2.9 billion, and earnings before interest, taxes, depreciation and amortization (EBITDA) of around $1.3 billion, against a previous forecast of above $1 billion.

SBM Offshore publishes results using its method of "directional reporting", introduced a decade ago, which records as revenue payments made during the construction phase prior to a lease's execution.

SBM Offshore's shares were up 6.76% at 12.47 euros ($13.35)at 0811 GMT, on track for their best day in over two years.

The group, which leases, operates, builds and sells floating production, storage and offloading (FPSO) vessels to produce and transport crude and gas, will transfer property of its Liza Unity FPSO to ExxonMobil with sale completion expected in November.

"SBM Offshore is then expected to operate the FPSO using its innovative integrated operations and maintenance model," Chief Executive Officer Bruno Chabas said in a statement. "This combines SBM Offshore and ExxonMobil’s expertise and experience."

With the Liza Unity sale, SBM Offshore's new outlook now indicates a year-on-year increase in core profit and revenue.

Kepler Cheuvreux analyst Andre Mulder said that the sale would generate higher profits than expected "with roll-on effect on agreed (bigger) floater sales to ExxonMobil that will happen in 2025 and 2027".

The Dutch company is most active in South America, with multiple projects in Brazil and Guyana. Last month, it was awarded another engineering contract with ExxonMobil for the Whiptail project in Guyana, which an ING analyst expects to see translated into a sale in 2024.

($1 = 0.9341 euros)

(Reuters - Reporting by Victor Goury-Laffont and Stéphanie Hamel; Editing by Sonia Cheema, Shri Navaratnam, Sherry Jacob-Phillips and Tomasz Janowski)


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