OREANDA-NEWS. Bruno Chabas, CEO of SBM Offshore commented:

"I'm pleased to see Lease and Operate cash flows continuing to grow with the delivery of Cidade de Maric in the first quarter and the expected delivery of FPSOs Cidade de Saquarema and Turritella around mid-year, all contributing to our strong liquidity position.  Delivery of these vessels combined with fleet operational reliability and focused cost management remain areas of attention while new business in the offshore deepwater segment is not expected to return to pre-downturn levels."

Year-to-date 2016 Directional revenue came in at US$442 million versus US$601 million in the year-ago period.  This decrease was entirely driven by lower Turnkey activity levels on remaining projects under construction and low order intake in 2015 and 2016.  Directional1 Turnkey segment revenue was down 55% year-on-year at US$148 million, while Lease and Operate segment revenue increased 7% from the year-ago period to US$293 million.  The growth in Lease and Operate revenue is mostly attributable to the first quarter 2016 start-up of FPSO Cidade de Maric? and the fourth quarter 2015 new field start-up under the Thunder Hawk DeepDraft(TM) Semi Production Handling Agreement in the U.S. Gulf of Mexico.

Directional1 Backlog as of March 31, 2016 stood at US$18.5 billion.  The Company added US$55 million in new orders related to FEED and offshore installation contracts.  Although SBM Offshore is actively involved in several tenders for FEED studies and final awards, it remains cautious on order intake in view of the continuing downturn in the oil and gas industry.

Proportional net debt as of March 31, 2016 amounted to US$3.1 billion, unchanged compared to the end of December 2015 as investments in new projects are offset by cash generation from the Lease and Operate portfolio and cash received from joint venture partners for the Turritella project. 

Gross Directional capital expenditure through the first three months of 2016 amounted to US$63 million, before the deduction of roughly US$78 million of upfront client payments.  This reflects the advanced construction progress of the Company's main projects nearing completion in the first half of 2016.  These amounts correspond to the SBM Offshore share in SBM Inc. (the Company's construction subsidiary) costs as well as costs directly incurred at the joint venture level, excluding changes in net working capital.  

Post period, the Cidade de Maric? joint venture received the US$140 million contractual start-up payment from the client, of which US$78 million is booked against SBM Offshore's Directional capital expenditure on the project.