SBM Offshore CEO To Step Down After Cost Over-runs Hit Profits
18 Agosto 2011 - 2:50PM
Dow Jones News
SBM Offshore NV (SBMO.AE) Thursday reported semi-annual results
that bested analyst expectations, but announced plans to replace
its chief executive after a large cost-overrun pushed its results
into the red.
SBM, which owns and operates offshore units for the oil and gas
industry, reported a net loss of $265.3 million, a big drop from
the $77.6 million net profit a year ago, but somewhat higher than
analyst expectations. SBM pointed to record orders and cited heavy
interest for additional work from Brazil, Angola and other
petroleum centers.
But company results have been tarnished by a $450 million
impairment charge related to two problem projects that has weighed
on shares since it was announced in July. SBM announced that "in
light of recent events," Chief Executive Tony Mace would step down
and it would recommend Chief Operating Officer Bruno Chabas for the
top spot.
"Stepping down is a matter of taking responsibility," Mace said
at a meeting without giving further detail.
SBM shares opened higher Thursday following the disclosure, but
later gave up their gains following a broader market retreat. At
11:52 GMT, SBM shares were down 3.2% to EUR13.50, while the
Amsterdam index was down about 2.6%.
SBM Offshore booked a $450 million impairment charge after it
was unable to reach a settlement for additional compensation for
cost overruns on SBM Offshore's Yme and Deep Panuke platforms which
have been installed on their respective offshore locations in
Norway and Canada. Legal action in the case of the Deep Panuke
platform has been initiated in April against EnCana Corporation
(ECA) and arbitration proceedings were initiated in January for the
Yme platform against Talisman Energy Inc. (TLM) But SBM said the
outcome is uncertain.
Neither EnCana nor Talisman were available for comment Thursday.
Talisman Chief Executive John Manzoni has publicly complained that
a "poorly executed fabrication contract" has hindered the
project.
ING said SBM's underlying results were "reasonable" and praised
the decision to replace Mace as "a valuable step" that could spur a
"fresh look" at the firm. But ING said it wanted more details on
the "huge" $450 charge.
Turnover for the first six months of 2011 rose 6% to $1.46
billion, driven by fleet operations, where SBM operates Floating
Production Storage Offloading (FPSO) units for its clients on a
leasing basis.
Earnings before interest and taxes, or Ebit, excluding the
impairment charge was $236 million, compared to $146 million a year
ago. The increase was mainly driven by the solid performance of the
Turnkey Systems segment, the company said.
- By Robin van Daalen; Dow Jones Newswires; +31 20 571 52 01;
robin.vandaalen@dowjones.com
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