Yahoo Finance TechnipFMC PLC (FTI) Q1 2024 Earnings Call Transcript Highlights: Strong Performance and ...
Total Company Revenue: $2 billion for the first quarter.
Total Company Adjusted EBITDA: $257 million, with an adjusted EBITDA margin of 12.6% excluding foreign exchange impacts.
Total Company Inbound Orders: $2.8 billion in the quarter.
Subsea Orders: $2.4 billion, representing a book-to-bill of 1.4.
Total Company Backlog: Increased sequentially to $13.5 billion.
Subsea Revenue: $1.7 billion, flat versus the previous quarter.
Subsea Adjusted EBITDA: $242 million, with a margin of 14%, up 90 basis points from the previous quarter.
Surface Technologies Revenue: $307 million, down 14% sequentially.
Surface Technologies Adjusted EBITDA: $41 million, down 21% from the previous quarter, with a margin of 13.5%.
Share Repurchases: $150 million in the first quarter, part of total shareholder distributions of $520 million in less than 2 years.
Net Debt: $327 million at the end of the period.
Free Cash Flow: Consumption of $179 million in the quarter.
Expected Total Company Adjusted EBITDA for the Year: Approximately $1.29 billion, an increase of about $40 million from previous guidance.
Release Date: April 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Doug, could you provide more details on the Northern Endurance project and what technologies FTI is providing, particularly in terms of the CCS nature of the project? A: Douglas J. Pferdehirt - TechnipFMC plc - CEO & Executive Chairman: The Northern Endurance project marks a major milestone as it involves the first application of an all-electric production system, which we are proud to be selected for. The project includes a specific CO2.0 tree as part of our 2.0 family, designed for CO2 injection with high technical standards, especially in valve cycling. This project, covering over 145 kilometers, will feature everything from the shore to the seafloor, emphasizing the integration of carbon transportation systems without any floating structures above water.
Q: Doug, can you comment on the new technologies used to unlock opportunities in more mature basins and elaborate on what you see in these regions? A: Douglas J. Pferdehirt - TechnipFMC plc - CEO & Executive Chairman: In mature basins, the opportunities lie in finding different producing horizons or extending from existing facilities. Technologies like the 20,000 psi production system for high-pressure, high-temperature conditions, and all-electric systems for long-distance operations are key. These technologies enable us to access deeper horizons and further step-outs, which are crucial for mature basins like the Gulf of Mexico's Paleogene formation.
Q: With the increasing number of iEPCI contracts, how is TechnipFMC managing capacity and leveraging joint ventures and partnerships? A: Douglas J. Pferdehirt - TechnipFMC plc - CEO & Executive Chairman: We utilize our ecosystem to expand beyond traditional capacity, especially in installation projects. Our approach includes partnering with other vessel operators and integrating them into the iEPCI concept, which helps drive higher asset utilization and sustainable through-cycle returns. Additionally, our Subsea 2.0 technology allows for faster manufacturing cadence, effectively doubling our plant throughput without needing additional capacity expansions.
Q: Can you expand on the use of the seafloor for CCS projects and whether this was an initial target in project planning? A: Douglas J. Pferdehirt - TechnipFMC plc - CEO & Executive Chairman: Our approach to CCS and other energy projects focuses on minimizing environmental impact by utilizing the seafloor for infrastructure, which is a departure from traditional onshore or shallow water setups. This method requires advanced technology and automation, areas where we excel due to our deep-water expertise. The Northern Endurance project exemplifies this approach, with all operations from transportation to injection handled subsea, supporting safer and more efficient CO2 storage.
Q: Regarding the all-electric system for Northern Endurance in CCS, when might we see uptake in oil and gas sectors, and what are the challenges discussed with customers? A: Douglas J. Pferdehirt - TechnipFMC plc - CEO & Executive Chairman: The adoption of all-electric systems in oil and gas is progressing in parallel with CCS. These systems, including electric subsurface safety valves, offer significant advantages, particularly for long-distance tiebacks where traditional hydraulic actuation is impractical or too costly. While all-electric systems are more expensive, their cost is offset by savings in other areas, such as reduced umbilical costs in tieback scenarios. We anticipate significant opportunities in brownfield projects where existing offshore infrastructure can be optimized with all-electric tiebacks.
Q: Can you discuss the new capital allocation policy and whether it reflects a strategic shift or improved financial outlook? A: Douglas J. Pferdehirt - TechnipFMC plc - CEO & Executive Chairman: The new capital allocation strategy, aiming for a net debt neutral position, reflects both an improved financial outlook and strategic considerations. This approach is supported by our upgrade to investment grade by Standard & Poor's and is aligned with our goal of maintaining operational flexibility while maximizing shareholder returns. The policy is designed to balance debt reduction, strategic investments, and shareholder distributions, ensuring sustainable financial health and growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
