SBMO – SBM Offshore N.V

SBM Offshore N.V specializes in designing, producing, and marketing maritime systems and equipment intended for the oil and gas industry. The group’s activity is organized around 4 families of products and services:

offshore oil and gas equipments: offshore import and export terminals for crude oil, refined products, and liquified natural gas (LNG), floating production and storage and offloading systems, floating production facilities based on ship hulls, semi-submersibles and tension leg platforms ;

offshore oil and gas production services;

offshore construction and installation contracting services;

other : special designs and engineering services, and delivery of specific hardware components for dynamically positioned drillships, semi-submersible drilling platforms, jack-up drilling platforms, large capacity offshore cranes, elevating and lifting systems, and crane vessels.

Net sales break down geographically as follows:

  • Brazil (34.4%),
  • Guyana (41.9%),
  • Norway (7.2%),
  • Canada (4%),
  • the United States (3.3%),
  • China (2.8%),
  • Equatorial Guinea (2.2%),
  • Nigeria (0.7%),
  • Malaysia (0.6%),
  • Angola (0.4%),
  • others (2.5%).

2020-05 Analysis

  • The sensitivity of SBM to oil prices is much more limited than for other oil services companies.
  • Most of its income is from long-term lease contracts for FPSOs which are indispensable for the production of oil from the offshore fields at which they are positioned.
  • The current situation and delays of payment should have a limited impact on SBM’s results in the next years.
  • SBM has a relatively limited net debt easily covered by the cash flows.
  • Strong cash generation => dividend (4% yield expected for 2020)
  • The recent share buyback program is returning another 6% of the market cap to shareholders.

Conclusion.

Current price 11.78€ => Target Price around 18€/20€.

This stock suits me for my income portfolio and also for my option trading.

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