The Company‘s primary business segments are Lease and Operate and Turnkey. Although financial results are presented per segment, activities between business segments are closely related. In addition to reporting under IFRS guidelines, SBM Offshore’s ‘Directional’ reporting methodology was expanded to reflect management’s view of the Company and how it monitors and assesses financial performance.
Full-year 2017 Directional revenue is US$ 1,676 million, a decrease of 17% compared to 2016 revenues of US$ 2,013 million. This is mainly caused by lower revenues in the Turnkey segment, partially offset by an increase in Lease and Operate revenues from the additional three FPSOs that were delivered in 2016 and which have now contributed during the full year. Directional Turnkey revenue totaled US$ 175 million, compared to US$ 702 million in 2016. Directional Lease and Operate revenue totaled US$ 1,501 million, compared to US$ 1,310 million in the year before.
Excluding non-recurring items, Underlying Directional EBITDA increased 4% or US$ 28 million when compared to 2016 and totals US$ 806 million. This result is primarily attributable to the Lease and Operate segment, but also driven by good performance in Turnkey through successful project close-out. The average Underlying Directional EBITDA margin for the Lease and Operate segment remained stable at 64%.
2017 underlying consolidated Directional net income attributable to shareholders stood at US$ 80 million, a decrease of US$ 41 million compared to the previous year. This is because the year-on-year increase of underlying EBITDA is more than offset by increased depreciation and interest due to the full year contribution of the additional three FPSOs delivered in 2016 and the negative result on Construction yards.
The above underlying figures are excluding several non-recurring items described in section 4.1 Financial review and impacting the 2017 Directional EBITDA and profit attributable to Shareholders by respectively US$ 210 million and US$ 283 million.
The Directional backlog, which is presented on a pro-forma basis in section 4.1.3, remains solid at US$ 16.8 billion compared to US$ 17.1 billion at year-end 2016. This is driven mainly by the awards for the FPSO Liza and for the Castberg turret mooring system, which are partially offset by revenues recognized during 2017 and the sale of the Turritella (FPSO) in January 2018.
Statement of Financial Position
Despite the market downturn, the Company’s financial position remains strong. Directional Shareholder’s equity decreased slightly from US$ 1,159 million to US$ 1,097 million, mainly because of non-recurring items impacting the 2017 Directional profit attributable to Shareholders.
Directional net debt significantly decreased to US$ 2,687 million at year-end 2017, compared to US$ 3,107 million in 2016, reflecting the strong operating cash-flow generated by the Lease and Operate segment and the impact of the cash proceeds of the settlement with a group of insurers on the Company’s Yme insurance case.
All of the Company’s debt consists of project financing held in special purpose vehicles. Over 2017, the Company has not drawn under its revolving credit facility and as such does not hold corporate debt.
Directional Cash and undrawn committed credit facilities amounted to US$ 1,878 million, US$ 254 million of which can be considered as being pledged to project debt servicing or otherwise restricted in its utilization.
For a total overview of the Company’s financials please see the Financial Statements in section 4 of the Annual Report.