By Dimitri Rhodes and Johan BODINIER
(Reuters) – Dutch oil and gas services firm SBM Offshore beat 2025 guidance expectations on Thursday, citing three new awards boosting its contract backlog.
The group’s shares rose 11.8% to 20.50 euros at 1108 GMT, their highest in 14 years.
The Amsterdam-based company’s backlog, or contracts it expects to complete, rose 16% to $35.1 billion.
It now sees 2025 directional revenue guidance above $4.9 billion, with around $2.7 billion from its turnkey business, which builds and sells floating production, storage and offloading vessels (FPSO).
That’s well ahead of the $4 billion forecast in a company-compiled consensus.
“We expect to see turnkey’s overall role to increase in the financials,” finance chief Douglas Wood said in an interview.
This will be in part driven by an increased client interest in the sale-and-operate model where clients finance the vessels during construction, resulting in significant deleveraging, Wood said.
“This greatly accelerates its profit recognition and cash generation,” Degroof Petercam analysts said in a note, adding the group’s 2025 guidance shows that profits can grow further.
CEO Ăivind Tangen told analysts on a call that the near-term market outlook looks strong and offers significant growth potential for SBM’s backlog and returns.
“We project that, by the end of the year 2025, Fast4Ward FPSOs will account for 12% of the world deepwater production,” he told Reuters in an interview.
The company, which provides floating production solutions to the offshore energy industry, reported directional revenue at a record high of $6.1 billion for 2024, compared to $4.53 billion in 2023.
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 firm raised its cash returns to shareholders by 30% to $1.59 per share for 2025. It expects to pay out a total of $1.7 billion by 2030, with upside potential from future growth.
($1 = 0.9580 euros)
(Reporting by Dimitri Rhodes and Johan Bodinier; Editing by Mrigank Dhaniwala)
