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.