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%).
- 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.
Current price 11.78€ => Target Price around 18€/20€.
This stock suits me for my income portfolio and also for my option trading.