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SBM Offshore slides after full-year guidance shift

By Reuters

By Juliette Portala

-SBM Offshore has lowered its revenue guidance, citing a change in the timing of a floating production storage and offloading (FPSO) joint venture offshore Brazil, denting the oil and gas services group’s shares.

The Dutch company, which supplies floating oil and gas production vessels, now predicts 2021 revenues of “above” $2.3 billion, from around $2.6 billion previously.

SBM said it assumed the divestment of the FPSO Almirante Tamandaré, whose contracts were signed with Petrobras last July, was closed after year-end, resulting in a shift in recognition of the associated revenues from 2021 to 2022.

There is no impact on anticipated earnings before interest, tax, depreciation and amortisation (EBITDA), the group said, as the project is not forecast to meet the requirements that would allow margin recognition this year.

The company’s shares were down 3.7% as of 1132 GMT, knocking more than 98 million euros ($112.33 million) off its market value, based on Refinitiv data.

ING analyst Quirijn Mulder highlighted higher-than-expected COVID-19-related costs and challenges as the curbs imposed to fight the pandemic have been longer than many had planned.

“We think that is the reason for SBM not to raise its $900 million EBITDA forecast during the full-year,” he said in a note to clients on the group’s trading update, which he said was “neutral to slightly negative”.

SBM said in a statement its FPSO Sepetiba, also in Brazil, had been affected by the supply chain environment.

KBC Securities’ analyst Olivier Vandewoude said it seemed to be the only project suffering from those issues.

As a specific mitigation plan has been implemented, the FPSO is still set to be completed at the end of 2022, SBM said in a call, with first oil targeted for 2023.

($1 = 0.8724 euros)