Recently-formed energy services provider TechnipFMC on Thursday recorded an increase in profit for the second quarter of 2017 despite lower revenues.
The company, formed in early 2017 through a merger of French Technip and U.S. FMC Technologies, recorded a profit of $164.9 million for the second quarter 2017, an increase from a $55.2 million profit made by Technip before the merger with FMC Technologies.
When it comes to revenues, TechnipFMC recorded $3.8 billion in revenues for the second quarter 2017 period, versus $4.96 billion in the prior-year quarter, on a pro forma basis.
Despite lower revenues, segment operating profit and adjusted EBITDA improved from the prior year, the company said.
“We just passed our six-month anniversary as a new company, and our merger integration efforts are delivering results. We remain confident in our ability to reach our synergy targets,” said Doug Pferdehirt, CEO of TechnipFMC.
Looking at the market situation, Pferdehirt commented: “The increase in major project FIDs and the acceleration of integrated FEED prospects during the first half of 2017 certainly adds confidence to our expectation for a step-up in Subsea orders for full year 2017.”
Pferdehirt added, “While project economics continue to improve, the recent commodity price uncertainty could result in a slowing of the pace of the recovery.”
Performance by segments
Breaking down the company’s performance to segments, the Subsea segment reported second quarter revenue of $1.7 billion. Revenue was down 28 percent from the prior year, primarily due to a reduction in project activity within Europe and Africa, partially offset by increased project activity in Asia Pacific.
The segment reported operating profit of $236.1 million. Vessel utilization rate for the second quarter of 2017 was consistent with the prior quarter at 67 percent. Subsea inbound orders for the quarter totaled $1.8 billion.
In the Onshore/Offshore business segment, second quarter revenues were $1.8 billion. Revenue declined 19.8 percent from the prior-year quarter due to the completion of several projects since the prior year period, most notably in the Middle East and Americas.
The segment’s reported operating profit for the period was $204.5 million. Inbound orders for the Onshore/Offshore segment for the quarter were $1.1 billion.
Finally, in the Surface Technologies segment, the second quarter revenues totaled $300 million, which was effectively unchanged from the prior-year quarter.
The segment reported an operating loss of $1 million; excluding charges and credits, operating profit was $22.5 million. Inbound orders for the quarter amounted to $276.3 million.
At the end of the second quarter period, the company’s total backlog totaled $15.2 billion.
TechnipFMC’s revenue guidance for 2017 for the Subsea segment is at least $6.1 billion, Onshore/Offshore at least $7.3 billion, and for the Surface Technologies segment it is at least $1.4 billion.
Offshore Energy Today Staff