SBM Offshore's H1 2026: Record Backlog, Raised Guidance, and a Strategic Shift Beyond Oil

Strong execution and new awards drive a beat-and-raise, while the company lays groundwork for ocean infrastructure and gas monetization.

SBMO.AS · Earnings Call · 2026-08-06

What Changed at SBM Offshore

SBM Offshore kicked off 2026 with a bang, delivering a first-half that nearly doubled directional revenue to $4.9 billion and EBITDA to $1.3 billion, prompting an upward revision of full-year guidance. The SEAP awards from Petrobras, the FEED for ExxonMobil's Longtail, and the record $35.6 billion backlog are the headline numbers, but the call revealed a more strategic transformation: a deliberate move to scale beyond the traditional FPSO franchise and into broader ocean infrastructure. On the core business, CEO Oivind Tangen touted the company's execution capabilities, including the ability to run more than six FPSOs in parallel through standardization and partnerships. “Standardization is central to this approach. A standardized design allows us to enter projects with the same core organization, reducing complexity and optimizing engineering scope during execution.” — Oivind Tangen, CEO · 2026-08-06 This is a shift from prior years when management was more cautious about capacity constraints. CFO Douglas Wood added that the backlog now includes "around $8 billion on a net cash basis," underpinning a cash return program of $2.1 billion over the next six years.

Beyond Oil: Ocean Infrastructure and Gas

A new theme this quarter is the expansion into Ocean Infrastructure, exemplified by a partnership with Veolia for floating desalination. “The combination of those two opens up potential commercial avenues into space where special industrial applications where freshwater is required, could be mining or other types of markets.” — Oivind Tangen, CEO · 2026-08-06 This represents a pivot from the earlier focus on floating wind and wave energy, which was prominent in 2021-22 but has since been de-emphasized. The company is also positioning itself for gas monetization in deepwater, with the SEAP units featuring sophisticated gas treatment. Another strategic target is Namibia and the Venus prospect.

Venus was strategically important to SBM because we would like to be a frontrunner in Namibia.
Oivind Tangen, CEO · 2026-08-06

The company is keeping its discipline on returns, even if it doesn't win that tender.

Financial Strength and Risks

The balance sheet is improving. Net debt fell to $3.7 billion after the sale of FPSO One Guyana, and the pro forma leverage is around 1.6x EBITDA. However, CFO Douglas Wood cautioned about working capital volatility: “it's quite hard with the Sale and Operate project to project exactly because we can see the timing difference between the money we've invested and when we get paid for it by the clients.” — Douglas Wood, CFO · 2026-08-06 This is a recurring theme, but the company has also revealed that a subcontractor fatality in a Chinese yard, while tragic, has no operational impact on schedules.

Priorities and Discipline

Management has long preached discipline, as highlighted in a prior call: “We're going to be disciplined. What I mean by that is even if good opportunity were to arise at present if we don't have the capacity internally from an execution standpoint or from a financing standpoint or whatever else, we're not going to overextend ourselves.” — Bruno Chabas, CEO · 2022-02-10 That stance remains, but the company is now more confident in its ability to scale. However, the strategic shift toward ocean infrastructure marks a departure from the earlier all-in bet on floating wind: “We have identified the floating offshore wind market, which combines both high growth in the market and which combine the strength that SBM Offshore can bring to this market and for us to be able to take a leading position.” — Bruno Chabas, CEO · 2022-02-10 That ambition has been toned down, replaced by a more targeted approach. In summary, SBM Offshore's H1 2026 is a story of strong execution, record backlog, and a subtle but clear strategic expansion beyond its core FPSO business. The raised guidance and new awards validate the model, while the foray into ocean infrastructure and gas adds optionality. The key risk remains the lumpy working capital profile inherent in the Sale and Operate model, but the company's balance sheet discipline provides a cushion.