SBM Offshore Reports Mixed Earnings with Significant Directional Growth

SBM Offshore N.V. sees a significant rise in directional profit, despite a drop in IFRS profit. The company’s earnings per share for the year decreased, but it anticipates strong growth in 2025 revenues.

Date: 20-02-2025

AI Rating: 5

Profit Analysis

SBM Offshore N.V. has reported a mixed financial performance in fiscal 2024. The IFRS profit attributable to shareholders fell dramatically by 69 percent to $150 million from $491 million in the previous year, which is a significant decline.

The company's earnings per share (EPS) showcased a similar trend, dropping to $0.84 from $2.74 last year. This presents a concerning picture regarding the overall profitability from the shareholders' perspective.

However, on a directional basis, the company reported a substantial increase in profit, rising by 73 percent to $907 million from $524 million last year. The EPS also exhibited improvement, rising to $5.08 from $2.92 in the previous year’s quarter. This directional growth in profit might attract investor interest despite the overall drop in IFRS figures.

The EBITDA on a reported basis saw a decline of 16 percent to $1.04 billion from $1.24 billion. Nevertheless, there is a stark contrast in directional EBITDA which increased by 45 percent to $1.90 billion from $1.32 billion. This metric aligns well with the company’s strategy and operational efficiency.

In terms of revenue, there was an overall decline of 4 percent, totaling $4.78 billion compared to $4.96 billion in the last financial year. However, here too, the directional revenue surged by 35 percent to reach $6.11 billion from $4.53 billion last year, which is highly encouraging.

Looking forward, SBM Offshore is predicting strong growth, expecting its 2025 directional revenue to surpass $4.9 billion. This growth is projected to be supported by the Lease and Operate segment contributing over $2.2 billion and the Turnkey segment approximately $2.7 billion.

Additionally, the company plans to raise its fixed cash return by 30% to $1.59 per share, supported by a proposed dividend and a share repurchase program. This initiative aims to deliver at least $1.7 billion in cash returns to shareholders over the next six years, which is a positive signal for investors looking for returns.

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