SBM OFFSHORE FULL-YEAR RESULTS 2013

SBM OFFSHORE FULL-YEAR RESULTS 2013  Strong performance; robust foundation for growth  SCHIEDAM, Netherlands, Feb. 6, 2014 (GLOBE NEWSWIRE) -- SBM Offshore  finished  2013 with a  strong underlying financial  performance, ahead of  expectations.  The Company has  now put  most of  its legacy  projects to  rest, secured  the  balance sheet  and  refocused  its  activity  around  the  FPSO-led  strategy.  Directional^1 revenue increased 13%  to US$3,445 million, while  Directional^1  backlog reached  US$23  billion. This  was  reinforced by  strong  operational  performance with consistently high uptime across the fleet of over 99%.  Three  prestigious FPSO awards were won during the year (Cidade de Maricá, Cidade  de  Saquarema and  FPSO Stones),  two  FPSOs (Cidade  de  Paraty and  OSX-2)  were  delivered on  time  and  on  budget and  Deep  Panuke  platform  reached  full  production capacity and is now fully on hire.  Bruno Chabas, CEO of SBM Offshore commented:  "2013 was  a  year of  progress  on  all fronts:  strategic,  operational  and  financial. Our Company is now focused, without distraction, on its future. Our outstanding project wins in Brazil  and the US Gulf  of Mexico sum-up what  is  best about SBM Offshore: staying close to our clients, using our technological edge to solve their problems and taking pride in our work. Our industry  faces  a challenging period, but we believe  SBM Offshore is strongly positioned.  We  possess a balanced  portfolio of projects,  the ability to  offer a choice  of  financing options for  clients and  the leading  position in  a niche  service  which the oil industry needs to sustain future production."  Financial Highlights    oDirectional^1 revenues were up 13% to US$3,445 million in FY'13, and     underlying Directional^1 EBIT increased by 28% to US$535 million   oDirectional^1 Backlog up by 39% to a record level of US$23 billion   oAwarded three Lease & Operate FPSO contracts:Cidade deMaricá,Cidade de     SaquaremaandFPSO Stones.   oFPSOsCidade de ParatyandOSX-2delivered on time and on budget   oCash at the end of the period was US$200 million; undrawn credit     facilities of US $1,234 million   oNet debt at the end of December stood at US$2,691 million   oAgreement to decommission the Yme platform and settle outstanding issues     with Talisman for US$470 million   oUpdate to residual values and decommissioning costs resulted in one off     non-cash charges of US$158 million   oSuccessful 10% Rights Issue at €10.07 per share raised US$247 million in     new equity                   Directional^1                  IFRS                                                                  in US$ million    FY 2013   FY 2012*  % Change  FY 2013   FY 2012*  %                                                                         Change Revenue           3,445     3,059      13%       4,803     3,639      32% Turnkey           2,367     2,082      14%       3,784     2,706      40% Lease and         1,078     977        10%       1,018     932        9% Operate EBIT              98        (79)       NM        293       38         NM Underlying EBIT   535       420        28%       735       537        37% Net Income        (58)      (175)      NM        111       (79)       NM (Loss) Underlying Net    375       298        26%       545       394        38% Income (Loss) Total Order       10,012    1,440      NM        10,081    1,440      NM Intake                                                                  in US$ billion    31-Dec-13 31-Dec-12* % Change  31-Dec-13 31-Dec-12* %                                                                         Change Backlog           23.0      16.5       39%       19.7      14.5       36% Net Debt          -         -          -         2.7       1.8        48% Solvency Ratio    -         -          -         30%       27%         *Restated for comparison purposes (Paenal)                             Guidance  Management is issuing 2014 Directional^1 revenue guidance at similar levels to 2013, of approximately US$3.4  billion, which is  based on conservative  award  assumptions. Turnkey and  Lease &  Operate revenues  are also  expected to  be  approximately in line with 2013 levels.  2013 Company Overview  Introduction  The Company began its transformation in 2012, re-focusing its strategy  around  FPSOs and related products and services,  followed by far reaching changes  to  the organisational  structure  emphasising  accountability,  transparency  and  compliance. The  results, strong  revenue growth,  good core  performance  and  record backlog clearly began to  emerge in 2013. The transformation  continues  as the Company  focuses on strengthening  project controls, support  functions  and operational  disciplines  across  the business.  This  is  being  achieved  through a  programme  to improve  ways  of  working for  people,  and  through  processes and systems designed to increase effectiveness, deliver control  and  allow the Company to "work as one."  Apart from the on-going internal investigation into potentially improper sales practices, the Company has  largely consigned its legacy  issues to the  past.  The Yme settlement was signed in  March and the Deep Panuke platform  achieved  Production Acceptance in December 2013. Asset values have been adjusted  where  required. Through the corporate and project financing activities completed  in  the year,  the financial  position  of the  Company is  markedly  strengthened  enabling it to competitively address the increasing demand for larger and more complex projects from our clients.  The  project  award  delays  encountered  in  2012,  combined  with  a  strong  commercial effort, resulted in record order levels in 2013 with  Directional^1  Order Intake of US$10.0 billion and Directional^1 Backlog of US$23.0 billion.  Consistent with the Company's  strategy to focus on  its core business and  to  further  strengthen  the  financial  position,  a  number  of  non-core  asset  divestments were made during the period, which include the sale and lease back transactions of two out of three office  properties in Monaco and the sale  of  its non-core "COOL(TM) hose" technology.  In the first half of the year, the Company strengthened its financial position through a  1 for  10 rights  offering of  new ordinary  shares raising  US$247  million and, as a result of the settlement with Talisman, an additional  US$27  million top-up from HAL Investments B.V. (HAL) as a share premium contribution on the new ordinary shares it acquired through a private placement in December 2012.  The Company secured a Project Loan facility for FPSO N'Goma for US$600 million and bilateral  credit facilities  for  FPSO Cidade  de  Maricá and  Cidade  de  Saquarema for US$600 million. The  additional liquidity and greater  financial  flexibility have  further improved  the Company's  risk profile  for  securing  funding for future projects.  Directional ^1 Reporting  In 2013,  in  order to  provide  its  shareholders with  clarity  on  business  performance above and beyond the  regular IFRS-based disclosures, the  Company  introduced Directional^1  reporting.  Directional^1  reporting  addresses  the  complexity in the Group's  business model whereby  turnkey sales are  combined  with construction projects for its own lease & operate portfolio. Furthermore, the Company's FPSO lease  & operate contracts  are increasingly classified  as  'finance leases', which  adds further complexity  by accelerating revenue  and  profit recognition into the construction phase, well before rents are invoiced to, and paid  by, the client.  The Directional^1 view  extends reporting  with  non-IFRS disclosures showing revenues and results more in line with  operating  cash flows  to  simplify some  of  these  complexities. This  is  designed  to  increase transparency and understanding of performance and provide disclosures of Backlog and Income Statement based on Directional^1 principles.  Directional^1 reporting principles are:    oDirectional^1 reporting is an additional disclosure to IFRS reporting   oDirectional^1 reporting assumes all lease contracts are classified as     operating lease   oDirectional^1 reporting is limited to restating revenue and operating     income; no balance sheet restatements are made   oDirectional^1 reporting is included in the Financial Review  In order  to  introduce  Directional^1 reporting,  the  Company  achieved  the  following steps:    oDisclosure of Directional^1 income statement and Backlog for H1 2013 and     the H1 2012 comparison was made in August with the Half-Year results   o2013 transition period to promote Directional^1 reporting as the main     indicator for Company performance and variance analysis   oFull Year 2013 Directional^1 income statement disclosed with 2012     comparison   o2014 guidance for Directional^1 revenue  The need  for  the  introduction  of  Directional^1  reporting  is  acute  and  significant: revenue reported under IFRS rules exceeds the Directional^1  view  by some US$1.4 billion  in 2013. This represents  the present value of  future  income to be  invoiced and realised  over the  next 20 years.  Under IFRS  the  Company  reports  a  US$111  million  positive  net  income  attributable   to  shareholders for 2013,  while the  Directional^1 view  shows a  loss of  US$58  million. The  Management Board  highlights these  fundamental and  significant  differences to allow investors a balanced understanding of the results, giving insight in both rules and reality.           US$ mln*        2013                                2012                       Directional¹  IFRS        IFRS    Directional¹  IFRS        IFRS                                         Adjustment                           Adjustment                                                                                      Total Revenues  3,445         1,358       4,803   3,059         580         3,639         Third parties   1,078         (59)       1,018   977           (45)       932         revenues Lease   Gross Margin    (154)        13          (141)  (313)        14          (299) and     EBIT            (177)        13          (164)  (341)        14          (327) Operate Deprec.,         amort. and      (463)        73          (390)  (678)        59          (619)         impairment         EBITDA          285           (59)       226     337           (45)       292                                                                                       Third parties   2,367         1,418       3,784   2,082         625         2,706         revenues         Gross Margin    443           182         625     307           103         410 Turnkey EBIT            296           182         478     311           103         414         Deprec.,         amort. and      (15)         -           (15)   (23)         -           (23)         impairment         EBITDA          311           182         493     334           103         437                                                                                       Other         operating       33            -           33      0             -           0         income         Selling & Other   marketing       (0)          -           (0)    -             -           -         expenses         General &         administrative  (53)         -           (53)   (49)         -           (49)         expenses         EBIT            (21)         -           (21)   (49)         -           (49)                                                                                      Total EBIT      98            195         293     (79)         118         38        Total EBITDA    577           122         700     623           59          681        Net financing   (100)        -           (100)  (79)         -           (79)         costs         Income from        associated      1             -           1       4             -           4         companies        Income tax      (54)         (26)       (80)   (22)         (16)       (38)         expense        Profit/(Loss)   (55)         169         114     (176)        101         (75)                                                                                      Non controling  3             (0)        3       (1)          5           5         interests                                                                                       Net Profit        attributable    (58)         169         111     (175)        96          (79)         to         shareholders * Figures are expressed in million $US and may not add up due to rounding.   HSSE  Over the course of 2013  the Company achieved a  good safety performance in  a  range of its business  activities, and similar  to that of  2012 with a  Total  Recordable Injury Frequency Rate (TRIFR) of  0.40 in 2013 compared to 0.38  in  2012. However, the  Lost Time  Injury Frequency Rate  (LTIFR) deteriorated  to  0.15 in 2013 from  0.06 from 2012.  A number of  corrective actions have  been  taken to help raise our standards.  Compliance  In 2012, the  Company announced  it had initiated  an internal  investigation,  conducted by  outside  counsel  and  forensic  accountants,  into  potentially  improper sales  practices.  The  Company  has disclosed  the  results  of  the  internal investigation to  the appropriate authorities  and remains in  active  dialogue. As the  investigation is  still in progress  it is  not possible  to  provide further  information  or an  estimate  of the  outcome,  financial  or  otherwise. The  Company has  continued and  expanded its  efforts, started  in  2012, to enhance its compliance program.  Yme  In March, the Company reached an agreement with Talisman to terminate the  Yme  MOPU^stor contract for a settlement of US$470 million. The settlement included the termination of the existing agreements and arbitration procedures and  the  decommissioning of the MOPU.  As the Company had  already made a provision  of  US$200 million in 2012, the difference of US$270 million was recognised in the 2013 results.  Deep Panuke  The Company completed the debottlenecking process, and brought the Deep Panuke platform  to  full  production  capacity  safely  and  received  a  Production  Acceptance Notice (PAN)  from the  client in  December 2013.  The platform  is  currently on hire and generating full day rate.  Strategy  Last year the Company  re-focused its strategy on  its core business of  FPSOs  and associated products and services. Since  the beginning of 2013, new  award  announcements for two FPSOs for Petrobras in Brazil and one FPSO for Shell  in  the Gulf of  Mexico demonstrate  progress is  well underway.  As the  industry  leader, the Company continues  to strive for  an improved risk/reward  balance  for its FPSO products and services and has identified an encouraging  pipeline  of projects in the medium term.  Investing in our Future  Over the course of 2013, the  Management Board focused its attention on  three  core strands  of  activity  to  develop  and  improve  SBM  Offshore's  future  performance. During  2014,  these  programmes  will  carry  incremental  costs  equivalent to 2.5%-3% of Directional^1 revenue.  With the lengthening  life spans of  FPSOs, there  is an emerging  need for  a  defined fleet maintenance programme, over  and above the standard  operational  expenditure on individual vessels. This will be a focused two year  investment  programme with clear operational and financial benefits.  Despite recent  progress,  there  is  a distinct  need  to  permanently  embed  improved efficiency and  ways of  working across multiple  disciplines. A  two  year transformation programme, named Odyssey 24, will create the foundation to deliver consistently  outstanding performance.The  programme  is led  by  SBM  senior staff members, dedicated for  the project duration, and using  external  advisors.  Maintaining its  technological lead  position in  complex floating  production  systems, and associated  mooring systems,  is critical  for SBM  Offshore.The  company will continue to identify technology trends in the offshore oil &  gas  market, prioritising development work to address key areas of demand.  Outlook and Guidance 2014  2013 has been a  strong year for SBM  Offshore. Revenue growth and  underlying  EBIT margins were excellent as the Company successfully progressed its EPC and Lease & Operate portfolio.  The Company is providing 2014 guidance on the basis of Directional^1  results.  Directional^1 revenue is  expected to come  in at similar  levels as in  2013,  approximately  US$3.4   billion,  which   is  based   on  conservative   award  assumptions. Turnkey and  Lease &  Operate revenues  are also  expected to  be  approximately in line with 2013 levels.  The Company expectsa  level of capital  investmentshigher than 2013  levels.  Furthermore, the Company will continue to attract necessary project  financing  for thefunding of new, or recently awarded, leased FPSOs under construction.    Dividend  The Management Board reiterates that the Company will not pay a dividend  over  2013, in  view of  the  losses incurred  in  2011 and  2012  and the  need  to  strengthen the balance sheet. The Management  Board intends to discuss at  the  Annual General  Meeting (AGM)  in 2015  a change  of dividend  policy,  making  dividends dependent on  available free cash  flow as opposed  to the  existing  policy of paying out 50% of IFRS  net income. Given the on-going execution  of  the Group's  record project  backlog,  the Management  Board does  not  expect  positive free cash flow  for 2014 or 2015.  Following the 2015 Annual  General  Management meeting the Management Board intends  to propose a payout ratio  of  between 25% and 35% of Directional^1 net income subject to the availability of free cash flow.  Financial Review  Highlights  The consolidated Directional^1 result for 2013 is a net loss of US$55  million  (2012  Directional^1  net  loss  of  US$176  million).  This  result  includes  divestment profits, impairment  charges, and other  non-recurring items  which  generated a  net loss  of US$433  million in  2013 (US$473  million in  2012).  Directional^1 net loss attributable to  shareholders amounts to US$58  million  (US$175 million  loss  in  2012).  Excluding  divestment  profits,  impairment  charges,  and   other  non-recurring   items,  the   underlying   consolidated  Directional^1 result attributable to shareholders for 2013 improved by 26%  to  a net profit of US$375 million (2012 net profit of US$298 million).  Taking into  account  IFRS  adjustments related  to  finance  lease  contracts  totalling US$169 million and representing mainly the deemed net profit on  the  Company's  share  in  the  Joint  Ventures  (JV)  acquiring  the  FPSOs  under  construction, the consolidated IFRS result for 2013 is a net profit of  US$114  million (2012 net  loss of  US$75 million).  IFRS net  income attributable  to  shareholders amounts to US$111 million (US$79 million loss in 2012).  The Directional^1  loss per  share  amounted to  US$0.28  (loss per  share  of  US$1.00 in 2012).  Adjusted for  divestment profits,  impairment charges,  and  other non-  recurring  items underlying  Directional^1  net income  per  share  increased by 8% for 2013 despite dilution to US$1.84 per share, compared  with  US$1.70 in 2012.  Net debt at  the year-end amounted  to US$2,691 million  (US$1,816 million  in  2012) with  bank covenants  met  and available  committed bank  facilities  of  US$1,234 million.  Total Directional^1 orders in the year came to US$10,012 million (split 43%  /  57% between  the  Lease &  Operate  and the  Turnkey  segments  respectively),  compared to US$1,440 million achieved in 2012.  Directional^1 turnover increased by 12.6%  to US$3,445 million, in  comparison  with US$3,059 million in 2012, mainly as a result of higher Turnkey  revenues.  Taking into  account  IFRS  adjustments related  to  finance  lease  contracts  representing mainly  the deemed  revenues on  the Company's  share in  the  JV  acquiring the FPSOs under  construction, IFRS turnover  increased by 32.0%  to  US$4,803 million, in  comparison with US$3,639  million in 2012,  mainly as  a  result of higher Turnkey revenues.  Total Directional^1  order portfolio  at the  end of  the year  was  US$23,025  million compared to US$16,459 million at the  end of 2012, an increase of  40%  reflecting the  high level  of  orders in  2013.  Of this,  US$20,146  million  relates to  the  non-discounted  value  of the  revenues  from  the  Company's  long-term lease contracts in portfolio at year- end.  Directional^1 EBITDA amounted to US$577 million (including non-recurring items of US$248  million), representing  an approximately  7% decrease  compared  to  US$623 million in 2012.  IFRS EBITDA  amounted  to US$700  million  (including non-recurring  items  of  US$252 million), representing an approximately 3% increase compared to  US$681  million in 2012.  Directional^1 operating result (EBIT) increased to US$98 million profit  after  impairment charges,  divestment profits  and  non-recurring items  for  US$437  million compared to  US$79 million  EBIT loss  in 2012  which included  US$499  million of non-recurring items related to the Yme and Deep Panuke projects.  IFRS  operating  result  (EBIT)  increased  to  US$293  million  profit  after  impairment charges,  divestment profits  and  non-recurring items  for  US$442  million compared to US$38  million EBIT profit in  2012 which included  US$499  million of non-recurring items related to the Yme and Deep Panuke projects.  The year was marked by the following financial highlights:    oStrong order intake of US$10.0 billion boosting Directional^1 backlog to a     record high level of US $23.0 billion.   oTalisman Yme MOPUstor project settlement of US$470 million (US$200 million     recognised in 2012, the difference of US$270 million recognised in 2013).   oThe Deep Panuke platform went on hire following the receipt of Production     Acceptance Notice in December. Additional costs associated with the delay     and debottlenecking totaled US$37 million in the period.   oThe carrying value of the ThunderHawk facility has been impaired by US$65     million. This was based on production trends from current reserves, and     projections from planned new fields. As such, total deliverable volumes     were determined to be insufficient to sustain the asset's book value. The     ThunderHawk semisubmersible production facility in the US Gulf of Mexico     is the only facility in SBM Offshore's Lease fleet portfolio which bears     exposure to reservoir risk.   oThe FPSO Falcon and VLCC Alba, laid up since 2009 and 2011 respectively,     have been classified as held for sale and consequently have been impaired     by US$53 million to their estimated market value in the second half of     2013.   oWith the upcoming expiration of contracts for FPSO Kuito and FPSO Brasil,     the Company has undertaken the reassessment of decommissioning costs. As a     consequence, a Company-wide review was conducted in Q4 to reassess     decommissioning expenses of all other vessels, resulting in a charge to     income of US$40 million.   oFPSO OSX-2 was successfully delivered as per contract in early September     with no further financial exposure to the client.   oFPSO Cidade de Paraty began oil production and went on hire in June 2013     following full systems acceptance by the client. The unit is owned and     operated by a consortium of affiliated companies of SBM Offshore (50.5%),     QCOG, Nippon Yusen Kabushiki Kaisha (NYK), and ITOCHU Corporation     (ITOCHU).   oAs part of the disposal program of non-core assets announced in 2012, the     Company completed sale and lease back transactions for two of three office     buildings in Monaco. The remaining building is now expected to be sold in     2014. Sales proceeds thus far exceed US$100 million, resulting in a book     profit of approximately US$27 million, including the sale of the "COOL(TM)     hose" technology.   oCapital expenditure and investments in finance leases in 2013 amounted to     US$1,423 million, exceeding 2012 level of US$1,217 million.   oNew financing agreements totaling US$600 million for FPSO N'Goma and four     bilateral credit facilities for FPSO Cidade de Maricá and Cidade de     Saquarema for US $600 million arranged in December.   oCash plus undrawn facilities amounted to US$1.4 billion at the end of     December 2013 compared to US$2.0 billion in 2012.   oThe Company finalised in April a 1 for 10 rights offering of new ordinary     shares raising US$247 million and an additional US$27 million from HAL as     a top-up to the share premium contribution on the new ordinary shares it     acquired through a private placement in December 2012.  Segmental information in  respect of  the two  core business  segments of  the  Company is provided in the detailed financial analysis.  Orders  Total Directional^1 orders for 2013 amounted to US$10.0 billion. This total includes new orders signed for US$9,401 million and variation orders signed for US$611 million.  The Company continued to capitalise on its strength and expertise in its core FPSO market, securing new orders including:  FPSO Stones (Gulf of Mexico)  The Company secured a contract from Shell for the supply and lease of an  FPSO  for the  Stones development  project  in the  Gulf  of Mexico.  The  contract  includes an initial period of ten years with future extension options up to  a  total of twenty years. The Stones  development is located in 2,900m  (9,500ft)  of water  approximately 320km  (200 miles)  offshore Louisiana  in the  Walker  Ridge area.  FPSOs Cidade de Maricá and Cidade de Saquarema for Petrobras  Contracts  have  been  executed  with  BM-S-11  subsidiary  Tupi  BV  for  the  twenty-year charter and operation of the two FPSOs Cidade de Maricá and Cidade de Saquarema.  Both FPSOs  are destined  for the  Lula field  in the  pre-salt  province offshore Brazil. BM-S-11  block is under  concession to a  consortium  comprised of PETROBRAS (65%), BG E&P  Brasil Ltda. (25%), and Petrogal  Brasil  S.A. (10%). The FPSOs will be owned  and operated by a Joint Venture owned  by  SBM Offshore,  Mitsubishi  Corporation,  Nippon Yusen  Kabushiki  Kaisha,  and  Queiroz Galvão Óleo e Gás S.A. with an SBM Offshore share of 56%. SBM Offshore is in charge of the construction. Planned delivery for FPSOs Cidade de  Maricá  and  Cidade  de  Saquarema  is  expected  by  the  end  2015  and  early  2016  respectively.  Turnover  Total Directional^1  turnover rose  significantly in  the year  due to  higher  revenues recognised  in  the  Turnkey segment,  especially  under  the  strong  contribution of the contracts signed in early 2013.    Turnkey third party Directional^1 turnover of US$2,367 million rose by 14% and represents 69% of  total 2013  turnover (2012:  US$2,082 million  representing  68%) as a result of a full year of construction progress on a number of FPSOs, such as  FPSOs  Cidade de  Maricá  and Cidade  de  Saquarema, FPSO  Cidade  de  Ilhabela, FPSO N'Goma, and increased year on year construction progress of the three major turrets, offset by the completion of FPSO OSX-2 and FPSO Cidade de Paraty and the loss of  revenue due to the sale  of GustoMSC completed at  the  end of 2012.  Construction commenced for the finance lease FPSO Stones. The project is fully controlled by SBM Offshore, as the Company currently owns 100% of the project.  Construction commenced for  the finance lease  of FPSOs Cidade  de Maricá  and  Cidade de Saquarema. The joint venture (JV) is controlled by SBM Offshore, and is consolidated  proportionately  to  the  Company's  56%  share  of  the  JV.  Directional^1 turnover reflects  SBM's income  generated by  invoicing the  JV  partners for their  44% share  in the  EPCI lump-sum  cost of  the FPSO  under  construction. IFRS adds to this the revenue calculated as the present value of the 56% SBM share of the future lease income.  Construction  continued  for  the  finance  lease  FPSO  Cidade  de   Ilhabela  throughout 2013, with  refurbishment and  conversion at  the Chinese  shipyard  completed. The vessel is currently in Brazil where the process modules at  the  Brasa yard will  be installed.  Start-up of the  facility is  expected in  the  second half  of 2014.  The joint  venture (JV)  is jointly  controlled by  SBM  Offshore, and is consolidated proportionately to the Company's 62.25% share of the JV.  Thus  Directional^1  turnover  reflects  SBM's  income  generated  by  invoicing the JV partners for their 37.75% share in the EPCI lump-sum cost  of  the FPSO under construction. IFRS adds  to this the revenue calculated as  the  present value of the 62.25% SBM share of the future lease income.  Construction was completed and the vessel has been on hire since June 2013 for the finance lease FPSO Cidade de  Paraty contract (SBM Offshore share  50.5%).  Directional^1 turnover reflects  SBM's income  generated by  invoicing the  JV  partners for their 49.5%  share in the  EPCI lump-sum cost  of the FPSO  under  construction. IFRS adds to this the revenue calculated as the present value of the 50.5% SBM share of the future lease income.  The twelve-year lease contract with ENI for FPSO N'Goma is also accounted  for  as a finance  lease. Construction,  refurbishment and the  lifting of  process  modules at the shipyard in Singapore is complete. The FPSO will sail to Angola for integration and start of production currently forecast in the second  half  of 2014. Directional^1 turnover reflects  SBM's income generated by  invoicing  Sonangol for their  50% share  in the  EPCI lump-sum  cost of  the FPSO  under  construction. IFRS adds to this the revenue calculated as the present value of the 50% SBM share of the future lease income.  Lease & Operate Directional^1  turnover increased by  10% to US$1,078  million  (31% of total  revenues; 32% in  2012), as a  result of the  start-up of  FPSO  Cidade de Paraty  in July  2013, the  full year  operation of  FPSO Cidade  de  Anchieta, and despite the exit from the fleet of FPSO Sanha.  Total IFRS turnover  rose significantly  in the  year due  to higher  revenues  recognised in the Turnkey segment, especially under the strong contribution of the finance lease  contracts under  construction, including  the Siakap  North  Petai extension to FPSO Kikeh, classified as a finance lease in 2013.  The ongoing charter  contracts for FPSOs  Cidade de Paraty,  Aseng, Mondo  and  Saxi Batuque are  similarly accounted  for as finance  leases, as  per IAS  17  Leases. Earned interest  in Lease  & Operate turnover  in 2013  in respect  of  these contracts amounted to US$87 million (2012: US$64 million).  Ongoing Construction Contracts  FPSO Stones (US Gulf of Mexico)  Construction continued for  the finance  leased vessel  throughout 2013,  with  refurbishment and conversion work being done at Keppel Singapore. The  charter  contract includes an initial period of 10 years with future extension  options  up to a  total of 20  years. When installed  at almost 3  kilometers of  water  depth, the FPSO Stones will be the deepest offshore production facility of any type in  the world.  The  vessel is  a typical  Generation  2 design,  with  a  disconnectable internal  turret and  processing  facility capacity  of  60,000  barrels of oil per day (bpd) and 15 mmscfd of gas treatment and export.  FPSO Cidade de Maricá and Cidade de Saquarema (Brazil)  Construction is ongoing for the two finance leased vessels. Refurbishment and conversion work  progressed throughout  2013 at  a Chinese  yard. The  charter  contract for  both vessels  includes a  period of  20 years  with options  for  extension. The two double hull sister vessels will be moored in  approximately  2,300 meters water depth  and with a storage  capacity of 1.6 million  barrels  each. The topside  facilities of  each FPSO weigh  approximately 22,000  tons,  will be able to  produce 150,000 bpd  of well fluids  and have associated  gas  treatment capacity of  6,000,000 Sm3/d.  The water injection  capacity of  the  FPSOs will be 200,000 bpd each.  FPSO Cidade de Ilhabela  Construction continued for  the finance  leased vessel  throughout 2013,  with  refurbishment and conversion  at the  Chinese shipyard  completed. The  vessel  arrived at year end 2013 in Brazil where the process modules at the Brasa yard will be installed. The FPSO will include topside facilities to process 150,000 bpd of  production  fluids, with  processing  of the  substantial  volumes  of  associated gas from the pre-salt field for export. Start-up of the facility is expected in the second half of 2014.  FPSO N'Goma  The construction,  refurbishment,  and  module  work  at  Keppel  shipyard  in  Singapore is nearing  completion. The FPSO  is expected to  arrive in  Paenal,  Angola for lifting of  the remaining modules and  completion of the FPSO.  The  schedule foresees a production start in  2014 at a design capacity of  100,000  bpd.  Turret Mooring Systems  The three large  complex turrets  for Prelude  FLNG, Quad204  and Ichthys  are  progressing well and on schedule at  their respective stages of completion  of  the project. These  three turrets  represent a substantial  proportion of  the  Turnkey segment with delivery of sections in 2013 reaching completion with the superstructure of  Ichthys as  the last  section in  2014. All  three  turrets  contain elements that require advanced  technology solutions for high  mooring  loads; total weight of  11,000 tons with  a height of  95 meters for  Prelude,  fluid throughput of 320,000 bpd in the  swivel stack on Quad 204 and 40  years  of continuous operation in harsh environment on Ichthys.  Main Projects Overview  Order Portfolio  Year-end Directional^1 order portfolio at  US$23.0 billion is higher by  39.4%  from last year's  level of  US$16.5 billion reflecting  the effect  of a  high  level of orders in  2013. The current  Directional^1 order portfolio  includes  US$20.1 billion (2012: US$13.6 billion) for the non-discounted value of future revenues from the long- term charters of the lease fleet. Approximately 53% of the total future revenues from the long-term charters of the lease fleet  will  be generated from the lease contracts which have yet to commence (FPSOs Cidade de Ilhabela, N'Goma, Cidade de Maricá and Cidade de Saquarema and Stones).  Turnkey Directional^1  order  portfolio  remained  stable  at  US$2.9  billion  (US$2.9 billion  in 2012),  representing approximately  1.2 year's  equivalent  turnover.  The Company's  order portfolio  as of  December  31, 2013  is expected  to  be  executed as per the table below.  Directional^1 Order Portfolio  in billions of US$ Turnkey * Lease & Total                              Operate 2014               2.0       1.1     3.1 2015               0.8       1.2     2.0 2016               0.0       1.5     1.6 Beyond 2016        0.0       16.4    16.4 Total              2.9       20.1    23.0  * Turnkey Systems and Turnkey Services segments have been merged into one segment "Turnkey".  Profitability  The primary business segments of the  Company are Lease & Operate and  Turnkey  plus "Other" non-allocated corporate income and expense items. EBITDA and EBIT are analysed per segment but it should be recognised that business  activities  are closely related, and certain costs are not specifically related to  either  one segment or another. For example, when sales costs are incurred  (including  significant sums for  preparing the bid),  it is often  uncertain whether  the  project will be leased or contracted on a turnkey lump sum basis.  In recent  years, new  lease contracts  are showing  longer duration  and  are  increasingly classified as finance leases for accounting purposes, whereby the fair value  of  the  leased asset  is  recorded  as a  Turnkey  "sale"  during  construction. This  has the  effect  of recognising,  in the  Turnkey  segment  during construction, part of the lease profits which would, in the case of  an  operating lease, be reported  through the Lease &  Operate segment during  the  lease.  Directional^1 EBITDA  in 2013  of US  $577 million  (US$623 million  in  2012)  consisted of US$285  million (US$337  million in  2012) from  Lease &  Operate  activities, US$311 million (US$334 million  in 2012) from Turnkey, less  US$19  million (US$48 million in  2012) of non-allocated  corporate, other costs  and  the 2013  book  profit  resulting  from  divesting  activities.  Restated  for  divestment profits, impairment  charges, and other  non- recurring items,  the  underlying Directional^1 EBITDA for  2013 increased by  19% to US$825  million  compared to 2012 underlying Directional ^1EBITDA of US$694 million.  IFRS EBITDA in 2013  of US$700 million (US$681  million in 2012) consisted  of  US$226 million  (US$292 million  in  2012) from  Lease &  Operate  activities,  US$493 million  (US$437 million  in  2012) from  Turnkey, less  US$19  million  (US$48 million in  2012) of non-allocated  corporate and other  costs and  the  2013 book profit resulting from divestment activities. Restated for divestment profits, impairment charges,  and other non-  recurring items underlying  IFRS  EBITDA for 2013 increased by 26% to US$951 million compared to 2012 underlying IFRS EBITDA of US$753 million.  As a percentage  of turnover,  Directional^1 EBITDA was  16.8% (2012:  20.3%).  Segmental Directional^1  EBITDA margins  for Lease  & Operate  stood at  26.4%  (2012: 34.5%), Turnkey  13.1% (2012: 16.0%)  excluding intercompany  projects.  The relative contribution to  Directional^1 EBITDA from  the segments was  48%  from Lease & Operate  and 52% from Turnkey.  In 2012, the corresponding  split  was 50% / 50%.  As a percentage of  turnover, IFRS EBITDA was  14.6% (2012: 18.7%).  Segmental  IFRS EBITDA margins for Lease & Operate stood at 22.2% (2012: 31.3%),  Turnkey  13.0% (2012: 16.1%)  and the  relative contribution  to IFRS  EBITDA from  the  segments was 32%  from Lease  & Operate  and 68%  from Turnkey.  In 2012,  the  corresponding split was 40% / 60%.  The Directional^1 operating  profit in  2013 amounted to  US$98 million  (EBIT  loss in 2012 US$79 million) with the following highlights:    oHigh contribution from the Turnkey segment, with a strong EBIT margin of     12.5% (14.9% in 2012 and 8.8% excluding GustoMSC and SBM Dynamic Installer     divestments), driven by good projects execution and positive settlements     on projects completed in 2013.   oThe level of Lease & Operate fleet activity was slightly higher to that of     2012 and resulted in an EBIT loss of 16.4% or a 26.6% profit excluding     impairment charges and other non-recurring items (-34.9% and 29.2%     excluding impairment charges and other non-recurring items in 2012).  Restated for divestment profits,  impairment charges, and other  non-recurring  items underlying  Directional^1  EBIT for  2013  increased by  28%  at  US$535  million compared to 2012 underlying Directional ^1EBIT of US$420 million.  Taking into  account  IFRS  adjustments related  to  finance  lease  contracts  totalling US$195 million and representing mainly the deemed net profit on  the  Company's share in the Joint  Venture acquiring the FPSOs under  construction,  IFRS EBIT in  2013 amounted  to US$293  million (EBIT  profit in  2012 US  $38  million).  Non-allocated "Other" income and expenses showed  a net cost of US$21  million  in 2013, compared with  US$49 million in 2012,  and includes US$27 million  of  book profit relating to divesting activities in 2013.  Net financing  costs  increased to  US$100  million compared  to  2012  (US$78  million) mainly as a result of interest  paid on the US Private Placement  set  up for FPSOs Cidade de  Anchieta and FPSO Cidade  de Paraty project loan.  The  average cost of debt came to 5.3% in 2013 (5.3% in 2012).  More generally, once production units  are brought into service the  financing  costs are  expensed  to  the  income  statement  whereas  during  construction  interest  is  capitalised.  It  should  be  emphasised  that  the  net  profit  contribution of newly operating leased units is limited by the relatively high interest burden during the  first years of  operation, although dedication  of  lease revenues to debt servicing leads to fast redemption of the loan balances and hence reduced interest charges going forward.  Interest income on the Company's cash balances was again very low in 2013  due  to the low level of short-term US interest rates. Main interest income of  the  Company  is  derived  from  interest  bearing  loans  to  joint  ventures  and  associates.  The reported share of profit in associates was minimal in 2013 (US$1  million)  as it was in  2012 (US$4 million).  In the future the  Company's share of  net  results in any  non-controlled joint  ventures (as  defined by  IFRS 11  Joint  Arrangements) will appear  in this  line item,  but at  present the  Company's  accounting policy  for  joint  ventures  continues  to  be  the  proportionate  consolidation method whereby the Company's  share of each income statement  or  statement of  financial position  line item  is included  in the  consolidated  financial statements.  The underlying Directional^1 Effective  Tax Rate in 2013  was stable at  13.6%  compared to 14.0% in 2012.    IFRS non-controlling interests in  the 2013 net result  amounted to income  of  US$3 million  compared to  the 2012  minority  share of  US$5 million  due  to  reported results from fully consolidated joint ventures where the Company  has  a minority partner (principally concerns FPSOs Aseng and Capixaba).  IFRS net result attributable to shareholders accordingly amounts to income  of  US$111 million (US$79 million loss in 2012).  As previously advised, the Company will not pay a dividend over 2013.  Statement of Financial Position  Total assets were  US$7.1 billion as  of 31 December  2013 (31 December  2012:  US$6.3 billion). The increase is largely  a result of the growing  investments  and activities recorded in 2013, and the proceeds from divestment of  non-core  assets and the rights offering.  Shareholders' equity increased from  US$1,458.6 million to US$2,064.2  million  due to 2013 net income of US$111 million, the 1 for 10 rights offering of  new  ordinary shares raising  US$247 million and  the US$27 million  top-up to  the  December 2012 private  placement with  HAL and  the US$201  million income  in  Other Comprehensive Income  resulting from  the variation  of hedging  reserve  related to financial instruments.  Capital Employed (Equity + Provisions + Deferred Tax Liability + Net Debt)  at  year-end 2013 amounted to US $4,946.8 million and increased by 45% compared to last  year's  level  (US$3,419.9  million).  This  was  due  to  the  positive  contribution to  equity  of  the  rights offering,  increase  to  the  private  placement realised at the end of December 2012 and the increase of net debt.    At 31  December  2013,  the  Company  has  undrawn  committed  long-term  bank  facilities totalling US$1,234 million (Revolving Credit Facility, FPSO N'Goma, FPSO Cidade de Ilhabela - SBM 62.25% share and bilateral credit facilities for FPSO  Cidade  de  Maricá  and  Saquarema)  available  for  financing   capital  investment in 2014 onwards.  Net debt at the year-end amounted to US$2,691 million (US$1,816 million at  31  December 2012) with net gearing at  126.0% which is slightly higher than  last  year despite the rights offering and HAL private placement top-up, due to the increase of  the  net  debt  driven by  the  US$470  million  settlement  with  Talisman. The  relevant banking  covenants (main  solvency, net  debt/adjusted  EBITDA, interest cover) were all met.  As in previous years, the Company has no off-balance sheet financing.  In 2012, the  Company announced a  plan to  sell and lease  back its  premises  owned in Monaco. The  Company completed sale and  lease back transactions  for  two of three office  buildings. The remaining building  is now expected to  be  sold in 2014.  As a  consequence, the  Company's related  property, plant  and  equipment continues  to  be classified  as  assets  held for  sale  for  their  carrying value  in  the Company  statement  of  financial position  as  of  31  December 2013, together with three  non-core vessels, the DSCV SBM  Installer,  the FPSO Falcon, and the VLCC Alba.  The current ratio defined as "current assets/current liabilities" increased to 1.67 mainly due  to the  increasing construction activities  on finance  lease  contracts, and the reduction of the current portion of loans and borrowings.  Statement of Financial Position  in billions of US$                 2009    2010    2011    2012    2013 Capital employed                   3,325.8 3.811.9 3,354.3 3,420.0 4,694.8 Total equity                       1,816.8 2,123.4 1,349.0 1,529.8 2,135.0 Net debt                           1,464.0 1,644.3 1,958.5 1,815.8 2,690.8 Net gearing (%)                    81.0    77.4    145.2   118.7   126.0 Net debt : unadjusted EBITDA ratio 2.39    2.31    2.41    2.7     3.8 Current ratio                      0.91    1.48    0.86    1.17    1.67 Solvency ratio                     NA      39.6    30.0    27.1    30.2  Capital Structure  Following the successful private placement of the Company's shares with HAL in December 2012,  the  subsequent  top-  up of  the  private  placement  of  the  Company's shares with HAL  and the 1  for 10 rights  offering of new  ordinary  shares in early  2013, the financial  position of the  Company is secure.  The  anticipated future  proceeds  from the  non-core  asset disposals  and  frozen  dividend  payments,  will  provide  further  equity  support.  The   Company's  medium-term objective remains to strengthen the balance sheet to a point  that  it will be able to obtain an investment grade credit rating in order to access the corporate bond market.  Investments and Capital Expenditures  Total investments  made in  2013  increased to  US$1,423 million  compared  to  US$1,217 million in 2012 and were recorded as:    * Capital expenditures of US$201 million (US$655 million in 2012).    * Investments in finance leases for US$1,222 million (US$563 million in     2012).  Total capital expenditures for 2013 (comprised of additions to property, plant & equipment  plus  capitalised  development expenditure)  amounted  to  US$201  million (2012: US$655 million). The majority  of this total is related to  new  investments in  the lease  fleet  (operating leases  only) and  other  ongoing  investments for which the major elements are:    * Final expenditure on the commissioning for the MOPU gas platform for     EnCana's Deep Panuke field in Canada.   * Ongoing investment in the Brasa integration yard in Brazil.    *  Refurbishment of a newly leased office "Le Neptune" in Monaco.  Expenditures in 2013 on the FPSOs Cidade de Paraty, Cidade de Ilhabela, Cidade de Maricá and Cidade de Saquarema for Petrobras, FPSO Stones for Shell, and on FPSO N'Goma for  ENI are excluded  from the  total amounts above.  Due to  the  classification of the  contracts as  finance leases, investment  in the  units  were recorded through construction contracts, with the investments in  finance  lease to  be ultimately  recorded  in non-current  financial assets.  The  net  investment in these finance  lease contracts amounted  to US$1,222 million  in  2013 (US$563 million in 2012) and are reported as investing activities in  the  consolidated cash flow statement.  The decrease in property, plant and equipment in 2013 to US$2,023 million  (31  December 2012: US$2,414  million) resulted  from capital  expenditure in  2013  less depreciation, impairment and amortisation, the reclassification as  asset  held for sale of the SBM  Installer (Diving Support and Construction  Vessel),  the FPSO Falcon and the VLCC Alba.  The  Company's   investments   comprise   the   external   costs   (shipyards,  subcontractors, and  suppliers), internal  costs  (man-hours and  expenses  in  respect of design, engineering,  construction supervision, etc.), third  party  financial costs including  interest, and such  overhead allocation as  allowed  under IFRS. The total of the above costs (or a proportionate share in the case of joint ventures) is capitalised  in the Company's consolidated statement  of  financial position as the value of the respective facility. No profit is taken on completion/delivery of such a system  for a lease & operate contract  which  is classified as  an operating lease,  apart from the  profit realised by  SBM  Offshore with  external partners  on the  construction contract  with a  joint  venture proportionally consolidated.  Cash Flow/ Liquidities  in billions of US$            2009  2010  2011    2012    2013 EBITDA                        613.3 712.4 813.2   681.0   699.6 Net liquidities/securities    146.7 103.4 164.7   715.1   199.5 Cash flow from operations     548.5 981.8 1,157.6 1,133.6 471.0 EV:EBITDA ratio at 31/12      7.7   7.6   6.8     6.3     9.9 EBITDA : interest cover ratio 10.2  8.2   16.3    10.5    12.7  Return on Average Capital Employed (ROACE)  ROACE (Return On  Average Capital Employed)  increased to 7.0%  and Return  On  average shareholders' Equity (ROE) also increased to 6.3%, both resulting from the increased activity and improved results in 2013 and the increase in equity and capital  employed  due to  the  top-up of  the  private placement  of  the  Company's shares with HAL  and the 1  for 10 rights  offering of new  ordinary  shares.    Cash Flow/Liquidity  IFRS EBITDA increased from the previous year mainly due to increased  activity  and improved results.  Net cash and  undrawn facilities  decreased slightly to  US$1,434 million,  of  which US$854 million can be considered as being dedicated to specific  project  debt servicing or otherwise restricted in its utilisation.  The Enterprise Value  to EBITDA ratio  at year-end 2013  stood at 9.9;  higher  than the previous year due mainly to increased market capitalisation.  Analyst Presentation & Conference Call  SBM Offshore  has  scheduled a  webcast  of  its Analyst  Presentation  and  a  conference call followed  by a Q&A  session at 9:00  Central European Time  on  Thursday, February 6, 2014.  The presentation will be hosted by Bruno Chabas (CEO), Peter van Rossum  (CFO)  and Sietze Hepkema  (CGCO). Interested parties  are invited to  listen to  the  call by dialling +31 45 631 6905 in  the Netherlands, +44 207 153 2027 in  the  UK or +1 480 629 9726 in  the US. Conference ID#: 4660813. Interested  parties  may also listen to the presentation via  webcast through a link posted on  the  Investor Relations section of the Company's website.  A replay of  the conference call  will be available  on Thursday, February  6,  2014, beginning at 11:00 Central European Time for one week. The phone  number  for the replay is +31 45 799 0028  in the Netherlands and +44 207 959 6720  in  the UK using access code 4660813#.  The webcast replay will also be  available  on the Company's website.  Financial Calendar                     Date        Year Publication of AGM Agenda              March 4     2014 Annual General Meeting of Shareholders April 17    2014 Trading Update Q1 2014 - Press Release May 9       2014 Half-Year 2014 Results - Press Release August 7    2014 Trading Update Q3 2014 - Press Release November 13 2014    Corporate Profile  SBM Offshore  N.V.  is a  listed  holding  company that  is  headquartered  in  Schiedam. It  holds direct  and  indirect interests  in other  companies  that  collectively with  SBM  Offshore  N.V.  form  the  SBM  Offshore  group  ("the  Company").  SBM Offshore provides  floating production  solutions to  the offshore  energy  industry, over the full product life-cycle.  The Company is market leading  in  leased floating production systems with multiple units currently in operation, and has unrivalled operational  experience in this  field. The Company's  main  activities are  the  design,  supply, installation,  operation  and  the  life  extension of Floating Production, Storage and Offloading (FPSO) vessels. These are either owned and  operated by SBM  Offshore and leased  to its clients  or  supplied on a turnkey sale basis.  Group companies employ over 9,600 people  worldwide, who are spread over  five  execution centres, eleven operational shore bases, several construction  yards  and  the   offshore  fleet   of   vessels.  Please   visit  our   website   at  www.sbmoffshore.com.  The companies  in  which  SBM  Offshore  N.V.  directly  and  indirectly  owns  investments are separate  entities. In  this communication  "SBM Offshore"  is  sometimes used for convenience where references are made to SBM Offshore  N.V.  and its  subsidiaries in  general, or  where no  useful purpose  is served  by  identifying the particular company or companies.  The Management Board Schiedam, February 6, 2014    For further information, please contact:  Investor Relations Nicolas D. Robert Head of Investor Relations  Telephone: +377 92 05 18 98 Mobile:    +33 (0) 6 40 62 44 79 E-mail:    nicolas.robert@sbmoffshore.com Website:   www.sbmoffshore.com  Media Relations Anne Guerin- Moens Group Communications Director  Telephone: +377 92 05 30 83 Mobile:    +33 (0) 6 80 86 36 91 E-mail:    anne.guerin- moens@sbmoffshore.com Website:   www.sbmoffshore.com  Disclaimer  Some of the statements contained in this release that are not historical facts are statements  of future  expectations and  other forward-looking  statements  based on  management's current  views and  assumptions and  involve known  and  unknown risks and uncertainties that could cause actual results,  performance,  or  events  to  differ  materially   from  those  in  such  statements.   Such  forward-looking statements  are subject  to various  risks and  uncertainties,  which may cause actual  results and performance of  the Company's business  to  differ materially and adversely  from the forward-looking statements.  Certain  such  forward-looking   statements   can  be   identified   by  the   use   of  forward-looking terminology  such  as  "believes",  "may",  "will",  "should",  "would be", "expects" or "anticipates" or similar expressions, or the negative thereof, or  other  variations  thereof,  or  comparable  terminology,  or  by  discussions of strategy,  plans, or intentions.  Should one or  more of  these  risks or  uncertainties materialize,  or should  underlying assumptions  prove  incorrect, actual results  may vary  materially from those  described in  this  release as  anticipated,  believed, or  expected.  SBM Offshore  NV  does  not  intend, and does not assume any obligation, to update any industry information or forward-looking statements set forth in this release to reflect  subsequent  events or circumstances.  To see the complete version of this press release please click on the link below:  SBM Offshore press release http://hugin.info/130754/R/1759599/595242.pdf  HUG#1759599