Finance
SBM Offshore beats growth estimates, shares at 14-year-high
Published by Global Banking & Finance Review®
Posted on February 20, 2025
2 min readLast updated: January 26, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on February 20, 2025
2 min readLast updated: January 26, 2026
SBM Offshore exceeded 2025 growth expectations, boosting shares to a 14-year high. The company reported a significant increase in contract backlog and directional revenue.
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 Øivind 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)
SBM Offshore expects its 2025 directional revenue guidance to exceed $4.9 billion, with around $2.7 billion coming from its turnkey business.
The company's shares rose 11.8% to 20.50 euros, marking their highest level in 14 years.
SBM Offshore's contract backlog has increased by 16% to $35.1 billion.
The sale-and-operate model is expected to drive increased client interest, leading to significant deleveraging and accelerating profit recognition for SBM Offshore.
SBM Offshore has raised its cash returns to shareholders by 30% to $1.59 per share for 2025, with a total payout expectation of $1.7 billion by 2030.
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