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SBM Offshore expects revenue drop in 2015, seeking MLP partnership

SBM Offshore expects revenue drop in 2015, seeking MLP partnership
SBM Offshore has announced revenue and profit growth in 2014, and stated its intention to launch an Master Limited Partnership (MLP).

Using SBM's directional figures, which classifies lease contracts as operating leases and proportionally consolidates takes vessel joint ventures, profit was up to $84m from a $58m loss last year, and underlying profit fell 7% to $349m.

Directional revenues were $3.3bn for 2013 and $3.5bn for 2014, and the company predicts revenues of $2.2bn for 2015, using "conservative award assumptions"

The company reviewed its balance sheet and has decided to pursue an MLP, the offering of which will be subject to market conditions.

In November 2014 the company settled out of court with the Dutch public prosecutor's office for $240m in an inquiry over alleged "improper payments" in Equatorial Guinea, Angola and Brazil between 2007 through 2011. Brazilian authorities are currently undertaking their own investigations into the payments, including by the Federal Prosecutor, the Federal Accounts Tribunal and the Comptroller General's Office.

SBM stated that it continues to cooperate with the authorities and, "is in active dialogue with the Brazilian Comptroller General's Office in order to come to an agreement to close the matter in Brazil."

In December last year, the company announced it was cutting 1,200 jobs and moving its headquarters to Amsterdam from Monaco.

Commenting on the results, Bruno Chabas, ceo of SBM Offshore, said, "The effects of the recent drop in oil prices are being felt across the offshore services industry in the form of lower order intake. This reduction is putting pressure on suppliers' capacity. While SBM Offshore is no exception, the current macro environment should not overshadow our sound 2014 financial results. In the last twelve months, we achieved significant progress on a number of operational and corporate objectives.

"Furthermore, the company is uniquely positioned to weather this period of uncertainty thanks to its strong lease and operate backlog that provides long-term cash flow, is unaffected by movements in oil prices or production levels. As a result, the company expects a steady increase in cash flow over the coming years as we continue to deliver the projects under construction."