SBM Offshore Stock

Ladies and gentlemen, thank you for holding, and welcome to the SBM Offshore Half Year 2026 Earnings. At this moment, all participants are in a listen-only mode. [Operator Instructions]. Just to remind you, this conference is being recorded. I would now like to hand the conference over to Mr. Oivind Tangen. Please go ahead.

Thank you, operator. Good morning, everyone, and welcome to SBM Offshore's Half Year 2026 Earnings Call. I am Oivind Tangen, CEO of SBM Offshore. And joining me on the call, as always, is our CFO, Douglas Wood. Thank you for joining us today and for your continued interest in SBM Offshore. Please take note of the disclaimer.

SBM Offshore entered 2026 with strong momentum and the first half of the year confirms the strength of our model, disciplined execution, robust client demand and continued value creation for shareholders. Our strategy continues to deliver profitable growth from our core offshore energy production activities. New order intake supported by sustained demand for lower carbon, lower-cost deepwater infrastructure and strong project execution reinforces the resilience of our business.

Our Fast4Ward program and disciplined investment in new hulls continue to enhance our competitiveness in a market supported by strong fundamentals. This performance is translating into value creation. We are expanding our portfolio, strengthening our financial position, delivering on our shareholder return commitments and supporting clients in developing critical energy infrastructure safely, efficiently and responsibly. While our priority remains to grow the core, we are also selectively applying our offshore expertise, engineering capabilities and life cycle know-how to assess opportunities in the broader ocean infrastructure market.

The first half of 2026 was marked by strong execution and solid performance across the business. The resilience of our model, combined with the commitment of our teams, enabled us to continue to deliver predictable outcomes in a dynamic environment. Commercial activity was strong.

In the first 6 months of the year, we secured the FPSO SEAP I and SEAP II awards from Petrobras and the FEED contract for ExxonMobil Guyana's Longtail development. These awards reflect client confidence in our execution capabilities and the continued robustness of our Fast4Ward program. Together, they strengthen our position in the lower cost, lower carbon deepwater market and support our long-term growth ambitions.

With the outlook for deepwater developments remaining strong, we ordered an additional Fast4Ward hull. We now have 2 hulls under construction to support ongoing tendering activity in addition to the hull allocated to ExxonMobil Guyana's Longtail development.

Our operational performance is also reflected in our financial results with directional revenue increasing to $4.9 billion and directional EBITDA reaching $1.3 billion. Supported by strong execution, recent commercial successes and a robust market outlook, we are increasing our 2026 directional revenue guidance to around $7.6 billion and our directional EBITDA guidance to around $1.9 billion.

The long-term fundamentals for deepwater remain attractive. Growing global energy needs continue to support demand for oil and gas, while production from existing fields naturally declines. Substantial new developments will therefore be required to help bridge the global supply-demand gap. Deepwater is well positioned to meet this demand. It combines attractive economics with breakeven costs around $20 to $35 per barrel and lower emission intensity than many other sources of oil production. This makes deepwater one of the most competitive sources for future oil and gas supply. As a result, we continue to see strong client demand for large-scale offshore developments. Industry forecasts indicate that the deepwater could account for approximately 30% of new oil production volumes up to 2030, reinforcing our confidence in the long-term outlook for the FPSO market and SBM Offshore's growth opportunities.

Deepwater projects provide safe, reliable and affordable energy and are attracting an increasing share of upstream investment. Major operators continue to prioritize offshore developments with around 80% of their exploration expenditure budgets directed towards deepwater. Over the next 3 years, we see a pipeline of more than 40 potential FPSO awards globally, including approximately 16 opportunities that align well with our expertise in large-scale deepwater FPSOs. These projects are concentrated in our core market around the Atlantic Basin, including Brazil, Guyana, Mexico and West Africa.

Gas is also becoming a more important element in our new FPSO designs, creating additional opportunities. Larger gas volumes increase topside complexity from gas processing to reinjection or export for domestic use onshore. Our proven track record in managing large gas volumes strengthens our position in this growing segment.

Next, to highlight one of the key milestones of the first half, the award of the SEAP I and SEAP II FPSO contracts from Petrobras in the new basin. These awards follow the demanding tender process and demonstrate the competitiveness of our offering. They add significant value to our backlog and reinforce our position in Brazil, a strategic deepwater region. These FPSOs are large, technically complex units with sophisticated gas treatment facilities that enable pipeline quality gas export to shore. They are clear proofpoints of the industry trend where the monetization of gas is becoming an increasingly important part of deepwater development. Given this level of complexity, our standardized Fast4Ward program is key to the derisking of execution while maintaining cost efficiency. The replication of our in-house design across these design one, build two projects improves execution efficiency, enhances schedule certainty and supports disciplined delivery. This is what Fast4Ward is designed to deliver; lower execution risk, stronger cost discipline and improved schedule certainty through standardization and repeatability.

Let me now explain how SBM can scale execution capacity for further growth while already managing five projects in execution. Large FPSO projects typically take around 4 years to deliver. Given their increasing size and scope, there is limited room to shorten delivery time lines materially. However, we have clear levers to grow beyond our stated in-house capacity of six FPSOs in parallel while keeping the same core organization and execution discipline. 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. At the same time, strategic relationships and early engagement with suppliers and yards allow us to order long lead times in advance, improving predictability and supporting on-time delivery at scale.

Replication is another important enabler. Some clients adopt a design one, build many approach. Combined with the systematic application of lessons learned, this creates design, engineering and procurement synergies across multiple projects. It reduces scope, improves efficiency and allows us to deliver more projects with the same core organization.

Partnerships also expand our execution capacity beyond the core organization. Standardization is critical here because standardized work scopes, whether in detailed engineering or topside construction, are easier to place with trusted strategic partners. By remaining disciplined on what we outsource, we can expand capacity while maintaining the quality and consistency of our delivery model.

Together, these enablers allow us to scale execution capacity and support further growth in a strong market.

In our turnkey portfolio, we are making good progress across five major projects under construction, and we have a well-phased execution plan extending into the next decade. FPSO Jaguar for ExxonMobil is the most advanced with first oil expected in 2027. FPSO GranMorgu for TotalEnergies and FSO Chalchi for Woodside are both more than 50% complete, while the 2 SEAP units for Petrobras are progressing through the early execution phase with contractual handover expected in 2030 and 2031. This space delivery profile supports disciplined growth. GranMorgu is being delivered in partnership with Technip Energies. Chalchi has limited upside scope with a disconnectable turret buoy completed and on its way to Mexico for installation. The SEAPs projects benefit from design replication, improving engineering and procurement efficiency.

Looking beyond the current portfolio, the market outlook remains attractive. Our investment in 3 Fast4Ward hulls, one of which has already been allocated to the Longtail development, together with future slot options we maintain with key yards, gives us flexibility to support future client demand while maintaining schedule certainty.

On the operations side, our fleet continues to perform exceptionally well with uptime around 99% across 16 operating units, demonstrating the consistency and robustness of our assets. Today, SBM Offshore is the largest FPSO contractor by oil production capacity, producing about 2 million barrels of oil equivalents per day, around 17% of total deepwater production or 2% of total global production. Our focus remains on safe and reliable operations while continuously identifying opportunities to enhance performance across the fleet.

By systematically applying lessons learned, we continue to improve asset performance and unlock additional production potential. This has supported successful debottlenecking on recent units in Guyana and Brazil, where we are achieving production records and delivering around 140,000 barrels of additional oil production, above initial nameplate capacity, accelerating value creation for our clients. We also continue to unlock value from our portfolio. During the first half of the year, we completed the sale of FPSO One Guyana and finalized the divestment of a minority interest in FSO Chalchi. In Angola, we continue to see opportunities to extend asset lives. We recently received a notification letter for a 2-year extension of the N 'Goma FPSO, and we have started brownfield work related to the extensions of FPSOs Mondo and Saxi Batuque, further strengthening our long-standing positioning in the country.

Looking ahead, we see additional opportunities to enhance fleet performance through operational data. By combining operational excellence with data-driven insights, we continue to improve reliability, efficiency and value creation across the fleet. We have built a digital ecosystem that connects offshore teams, workflows, remote support functions and operational data. By bringing together people, processes and data, we can identify opportunities earlier, improve planning and decision-making and apply lessons learned across the fleet. This supports more targeted predictive maintenance and asset integrity, strengthening performance throughout the asset life cycle.

In parallel, we continue to deploy technologies that support smarter and safer operations. Robotics are becoming increasingly important for asset inspection and maintenance, including confined spaces, tanks and hull inspections. These technologies reduce exposure to higher risk environments, improve inspection quality and consistency and support more efficient maintenance planning.

Beyond our core FPSO business, we are selectively applying the capabilities built over decades of offshore experience to address global challenges through ocean infrastructure solutions. As land-based solutions face increasing constraints, offshore infrastructure offers growing potential. Modularity, standardization and scalability make the ocean an attractive platform for deploying proven technologies at scale and in new environments.

By leveraging our expertise in offshore design, execution and operations, SBM Offshore is well positioned to enable proven industrial technologies offshore. One example is our partnership with Veolia to develop a floating desalination solution, combining Veolia's water treatment expertise with our ocean infrastructure and operating experience.

With more than 60 years of offshore experience and a strong track record in standardization and life cycle management, SBM Offshore can act as an offshore enabler of technology solutions in areas such as carbon capture, power, ammonia and freshwater. At the same time, we remain disciplined in capital allocation, risk management and the opportunities we pursue.

With that, I will now hand it over to Douglas for the financials.

Thank you, Oivind, and good morning, everybody. So as you've heard, we've delivered a strong set of results for the first half, and that's thanks to the performance of the project portfolio, the fleet, including the impact of the three large vessels we started up last year and of course, the sale of One Guyana and a share in the FSO Chalchi. This great performance from our teams in executing our existing portfolio drives the increase in EBITDA guidance from around $1.8 billion to around $1.9 billion. Then for revenue guidance, the SEAP awards and the Chalchi divestment drive the significant increase in guidance from about $6.9 billion to around $7.6 billion. Now while these awards won't get past the 25% completion stage and impact EBITDA this year, obviously, as you'll see from the backlog, that's to come. And on top of this, the FEED activity we have in hand, plus the market outlook speak to the further strong cash and margin potential. On the backlog, this increased to a record $35.6 billion with the SEAP awards offsetting significant consumption over the first half, where we had the One Guyana and Chalchi divestments on top of the strong underlying operational performance. And then we expect to generate around $8 billion from the backlog on a net cash basis.

Net debt was $3.7 billion, lower than year-end, driven by the sale of One Guyana and repayment of the associated financing. And this leads to a pro forma leverage ratio of around 1.6x EBITDA based on the rolling last 12 months EBITDA.

As we've mentioned in the past, construction financing that we had in place for Jaguar and likely Longtail and Sale and Operate temporary working capital movements will mean this will fluctuate a bit, but the long-term trend is to structurally lower leverage.

Finally, we paid the $100 million 2025 dividend in May and are formally reconfirming today the identical $100 million interim dividend for 2026 to be paid in September. And this, together with the ongoing $270 million equivalent buyback program, means we are on track relative to delivering a minimum $2.1 billion aggregate return for the 6 years 2026 to 2031 inclusive, with the anticipated upside potential materializing as we secure new awards.

And next, I will review the financials in a little bit more detail, starting with the backlog. But this was, as I mentioned, $35.6 billion. It's an increase of around $4.5 billion versus the year-end. So the addition of the 2 SEAP awards more than offset the consumption from the strong operational performance over the first half and the impact from the sale of One Guyana and a share in FSO Chalchi. On net debt, the One Guyana sale resulted in a significant decrease in leverage.

The total revenue was around $4.9 billion compared with around $2.3 billion for the first half 2025. The biggest contributor to revenue was Turnkey, above $3.7 billion compared with around $1.3 billion in the year ago period, and the main driver of the increase was the sale of One Guyana. On the Lease and Operate side, revenue was around $1.2 billion versus around $1 billion for the first half 2025. Here, the increase was driven by the contribution of the three large vessels that joined the fleet over the course of last year.

Now turning to EBITDA. This was over $1.3 billion, almost double the year ago period, and this increase was driven by Turnkey, where EBITDA was $813 million; that's up by almost $600 million compared with the year ago period. The main driver again being the One Guyana sale. Lease and Operate EBITDA was around $547 million compared with around $500 million in the year ago period. Again, that was mainly due to the contribution of the three new vessels, the impact of which on an EBITDA basis was partially offset by the Aseng and Thunder Hawk left the fleet at the end of last year, plus the comparative impact of the gain on sale of TK we saw in the first half 2025. Finally, other EBITDA was around $50 million negative. It's an increase versus around $40 million negative last year as a result of higher G&A costs to support growth activity.

Next, we're reconfirming the direction of travel on deleveraging. We foresee our leverage ratio staying below 3x going forward, but we could see some upward movement this year from the pro forma H1 number as we draw down debt on Jaguar and Chalchi and also depending on the timing of receipt of some large milestone payments relative to project progress at the year-end cutoff point. And that's a facet of the Sale and Operate model being that we can see some large but temporary movements in working capital, which can then obviously impact net debt. But again, we see the trend staying below 3x.

Turning to cash and the backlog on a net cash basis. This stood at around $8 billion. As highlighted in the chart we showed at year-end, the sale of One Guyana drove significant consumption during the period. Now while the impact of the SEAP awards was more than enough to offset this on a net cash basis, we also have an impact from the deconsolidation of the share of the Lease and Operate cash flow of FSO Chalchi sold to partners, which meant we ended up a little lower than year-end. Now this illustrates something it's important to bear in mind for the backlog linked to the Sale and Operate model.

Thanks to the SEAP awards, the Turnkey net cash backlog has more than doubled to $1 billion. Now this boosts the near-term cash, and that's very clear, as you can see in the chart. Now while the NPVs for Sale and Operate and Lease and Operate projects are similar in absolute net cash terms, the same award on a Lease and Operate basis is much higher as the cash comes much later. So that's why the sale of a portion of the 20-year Chalchi project has a relatively material impact. However, given ongoing FEED activity and the market outlook, we're optimistic we could see an increase at year-end.

Then looking more at the charts on the page, we've played out the blue bar on the left, which includes Turnkey and Lease and Operate over time in dark blue on the right-hand chart. And we have averaged net cash over 4-year cycles as Sale and Operate transactions can have a material impact in the early years and introduce significant year-on-year volatility, making a multiyear average a more representative measure of underlying cash performance.

As the backlog already includes the 2 new SEAP awards, we've then adjusted the light blue model scenario from February, showing two large FPSO awards for the next 6 years up to 2031 accordingly. So the scenario now has 10 rather than 12 FPSOs. Again, important to note here, we're not planning on shutting up shop and running down the business in 6 years and are confident of more to come thereafter from FPSO awards, but also from diversification into other ocean infrastructure solutions over time. We, therefore, maintained further illustrative waves of awards to the right of the model near-term scenario.

Then in the chart on the top right, we have the usual euro per share analysis of the backlog at a range of discount rates, where again, we've maintained the light blue models near-term scenario on top.

And looking at capital allocation. As a result of the strong operational performance and the backlog, we remain very much on track to deliver a minimum of $2.1 billion in shareholder returns for the 6 years 2026 to 2031 inclusive. The chart on the left is the same 6-year view as we showed in February for 2026 to 2031 inclusive. We're going to provide a further update for 2027 to 2032 inclusive with the 2026 full year results.

During the course of the year, of the $440 million cash return we intend to pay in 2026, we've already paid $100 million in dividends. We've repurchased around 3 million shares for $118 million, and we're formally reconfirming the $100 million interim dividend to be paid in September. The $440 million cash return represents a 7.2% cash yield based on the share price end of June. If you benchmark this to the AEX, this is top quartile.

Now as I mentioned, the $2.1 billion, it's a minimum based on the backlog we had in hand at the end of 2025. But obviously, since then, we've made very good progress on materializing the upside with the 2 SEAP awards, and we're working on the FEED for Longtail. So we're optimistic our year-end update will reflect further progress with more to come in the future as a result of the strong market outlook.

Finally, to cover the details of the guidance update. 2026 directional revenue guidance is updated from above $6.9 billion to around $7.6 billion, of which around $2.4 billion is expected from the Lease and Operate segment and around $5.3 billion (sic) [ $5.2 billion ] expected from the Turnkey segment. 2026 directional EBITDA guidance is updated from around $1.8 billion to around $1.9 billion. That's it for me. Now back to Oivind to conclude.

Thank you, Douglas. Very clear, as always. And no, we're certainly not planning on shutting up shops. So with that, to conclude, our first half performance demonstrates the resilience of SBM Offshore's life cycle model and the continued strength of the deepwater market, supported by disciplined execution, operational excellence and commercial momentum. We're growing the core with two new FPSO awards in Brazil and a FEED award in Guyana, reinforcing our position in key deepwater markets. The outlook for deepwater remains strong, and we are well positioned to capture our share of future opportunities. To support these opportunities, we recently ordered an additional Fast4Ward hull, bringing the total number of hulls under construction to three. These hulls strengthen our ability to respond to client demand while maintaining execution discipline and derisking delivery schedules. Finally, reflecting our execution performance, operational excellence and recent awards, we have increased our directional revenue and EBITDA guidance for 2026. I would like to thank our clients and stakeholders for their continued trust and support and our teams around the world for their dedication, collaboration and commitment to delivering our strategy. Thank you all for listening. We will now be happy to answer your questions.

[Operator Instructions]

Our first question for today comes from the line of Guilherme Levy from Morgan Stanley.

Firstly, perhaps to make the capacity discussion a little bit more concrete. Is there a particular phase of execution that we should think as the actual constraint, engineering, procurement, fabrication? Meaning if you get awards for the two new unallocated hulls, your headline number of orders will rise to eight rather than the rather of stated capacity? Of course, some will be almost complete. Others will still be in very early stages, so not necessarily an overlap of stages. So can we think about the six number as something applicable to a specific stage of execution rather than for the whole process? And then secondly, on Venus, there is a press article this morning saying that your competitor is now the front runner on the negotiations with Total. I know that you normally don't comment on the current state of bids, but perhaps can you tell us a bit about this prospect. What are the main challenges from an engineering execution standpoint? And where you think you have an edge versus others?

So particular constraints associated with the workplaces of the FPSO. So I guess the thing to think about the workplace is some are done largely in-house, some are done outsourced. So typically, our engineering and procurement is in-house. So that's where the partnership discussion comes into play, and we have a means of scaling up to add to that capacity constraint as it may be. On the supply chain, sort of equipment deliveries and yards, that is where we have time to plan ahead and look at the prospect pipelines and as we go through the commercial processes, scale up accordingly. So when we communicated in the past, it was sort of the sizing of the organization, a number of projects, project management, we can run in parallel. Now as we have gone in and have had very successful deliveries over the last few years and standardization is materializing or the learnings from standardization are materializing, we are able to reassess our view on capacity and expand that capacity beyond the six. So that it's always a function of the pipeline ahead and keeping a cost base in the organization that is optimized. So we don't see any particular constraints, but in terms of award base and historical execution models, that's where the six came in. We can look beyond that in the same very disciplined way and not compromising the quality of the execution.

When it comes to Venus, I think I've seen many upstream articles on Venus over the last few years. We don't know the outcome of the prospect yet. So beyond that, I don't think we have any further comments. It has no particular technicalities that compared to others is a good fit for our pipeline -- our portfolio. But beyond that, I don't have technical comments.

We are now going to take our next question, and this one comes from Luuk Van Beek from e Degroof Petercam.

First, a question about the statement that you included in your press release on an increasingly complex and volatile environment. I've seen it for the first time. So can you elaborate why you included it? Are there any specific new challenges, for example, in the supply chain? And the second question is on the impact of the Chalchi on the EBITDA guidance. Is there a significant impact from that? And finally, a question on the taxes, which were very low due to higher deferred tax assets in H1. Can you indicate if there will be any such change in H2?

Okay. Thank you, Luuk. So I'll do the first one, and Douglas will do the other two. So I mean, volatile environment, I think we're just observing a world that moves around a lot, and one could think that, that could impact elements of our operational activities or the commercial prospects. So we like to think that the predictability of our performance, whether it's operational and financial, is a bit of a contrast to that volatility and we like to emphasize that as a strength in our value proposition. And those are based on the parameters that we've communicated on before. So that, I think, is very consistent. And then I'll leave Douglas to two and three.

So Chalchi had a small impact, but not very significant impact on EBITDA in the first half. The tax is really about the One Guyana sale where we basically already paid the tax. So you have a big lot of income with no associated tax to pay.

We are now going to our next question, and this one comes from Philip Ngotho from Kepler Cheuvreux.

I have a few. Maybe just to start with a simple one. Just trying to understand the 2026 guidance and the bridge from the H1 EBITDA. Of course, One Guyana will not be present in H2. You discussed Chalchi just now. Are there any other items that we should be mindful of when looking in modeling H2 EBITDA versus H1? Then my second question is still on Venus as well. I appreciate it's an ongoing process and you're also limited in what you can disclose, of course. But I was wondering to what extent the competitors in the bidding process are maybe also placing more value on strategic entry into the market and willing to accept also lower margins. And we've been reading on about, of course, possible follow-on orders as well in the region. So is winning this first project, therefore, more important than in other bidding processes? And my last question is more on working capital going into year-end and net debt evolution. How much should we expect given the hull investments and any additional cost on SEAP and Longtail, just for more like sort of net debt figure.

All right. Let me take the Venus and then I'll let Douglas take the other two. So as to the commercial strategies of our competitors, I can't really comment. But we've always said that Venus was strategically important to SBM because we would like to be a frontrunner in Namibia. I think we see a lot of exploration activities in Namibia. So we'll see how that market evolves from there on. But as to -- when our own gross margins and the discussions around our commercial strategies, we don't compromise on the return expectations on our prospects. So there's no single prospect that will make us shift from our general appetite for returns to our shareholders. So we keep our discipline there as we do stay disciplined in the way we operate and run the company. So that's as much as I can say about that, I think, and I'll let Douglas talk to working capital and guidance.

Yes. Philip, so on the guidance, as you mentioned, obviously, One Guyana makes a big boost in the first half results. So yes, unfortunately, the year-end isn't going to be double that. But I think there isn't anything really significant other than needing to maintain a very good operational and project performance in terms of the delivery of the around $1.9 billion where we put the guidance. On the working capital, as I sort of mentioned in the remarks, 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. And especially when you have like a cutoff period, there can be like a few weeks between you book the expenditure and then you get paid for it a bit later. So there can be a bit of volatility there. Underlying, obviously, we recently announced a new hull. So that's going to be in our working capital. So that will -- there will be some increase associated with that.

We are now going to take our next question, and this one comes from Victoria McCulloch from RBC.

Just one question remaining for me. Can you talk a bit about how you've seen the tender pipeline evolve over the past 12 months? Obviously, the oil price has changed dramatically. The environment around the world has changed, but also it appears that competitive environment has shifted a little bit for you guys. But again, these are long-term projects, decisions aren't made quickly. So what are your customers telling you in terms of the tender pipeline, the opportunities, their appetite? Have you seen a shift in delays or any slowdown because it's hard to make decisions in this environment? Or are you seeing a continued acceleration as this -- I guess, the slides would suggest with the tender pipeline you present?

Victoria, thank you for your question. So in terms of tendering, before a prospect comes to tendering, there's been already a lot of work in exploration and for development to get enough definition before it reaches sort of our pipeline. So that wouldn't really be influenced by the more recent, let's call it, oil price hikes. So it's more about for us remaining on our model of early engagement with our clients and helping clients with -- as when they invite us in with their development plans to gain pace and use the SBM value proposition. And that dynamic hasn't really changed materially. And we see the continued pipeline in Guyana. We see other countries in West Africa, as we've spoken about before as well, emerging with opportunities, and we see Brazil still with a strong prospect pipeline in the years ahead. So for us, really the dynamic hasn't changed that much. What you've seen over the last couple of years is this change from more -- from Lease and Operate to more Sale and Operate, and that has doing something with the competitive landscape. It may bring in other types of contractors, which is where we refer back to our competitive positioning and the life cycle proposition of SBM. So it is competitive. It will remain competitive, but the tender pipeline, and we like to think that the deepwater in the Atlantic Basin, as we said, in the years ahead of us remains very strong.

Just as a follow-up to that, we've also seen a shift in the public commentary around decarbonization, certainly from the majors and throughout the value chain. How much has that impacted, I guess, the work you do that we don't see around decarbonization options? And that tender opportunity and that -- I appreciate it's much longer time line to that and it's much earlier stage, but have you seen a change as the outside environment has seen a change [indiscernible] ?

No. I think from our own perspective, right? So we've been working for many years on lowering the emission intensity of our FPSOs. So that's been an ongoing journey, and we bring that into our offering of reducing the environmental footprint of the FPSOs. And we're also conducting studies right now on modularized carbon capture systems that we are ready to integrate into our future FPSOs as and when they become as part of the specification in the actual prospects. Today, from the prospect in the market and the way the current market is, all the efficiency gains that we've developed and sort of already deployed on FPSOs that remains, of course, a part of the FPSOs of tomorrow. But the next step to carbon capture, we don't see it materializing yet or it may start to materialize. But nothing has really changed dramatically for us. We always want to be environmentally efficient and also deliver on reliable energy solution for the future. So let's see how policies evolve in the years ahead.

We are now going to take our next question, and this one comes from Mick Pickup from Barclays.

A couple of questions, if I may. They're both back of the envelope type questions. So I'm just thinking medium term here. So if I look at your Turnkey order book by year of execution, you've roughly got $3 billion into next year and $3 billion for '28. So if I'm looking on that longer outview, $3 billion already, Longtail adds a chunk as well. You expect to win a couple more units before then. Why would I be wrong in thinking that Turnkey doesn't go towards $5 billion of turnover medium term?

Is that your question?

Is that only question, Mick?

That's the starting one.

Okay.

Okay. All right. Shall I answer?

Yes, yes. Douglas, I don't do the numbers in there, so I stay away from that.

Yes. So just kind of generally, and I mean you can see it from our backlog chart. So the -- what we have in hand is what we have in hand. So that's obviously in the backlog. But what we're saying is there is a lot of potential from the strong market that we see. And that's why we included that model scenario you can look at now. I think we've been very clear that's not a forecast. It's not a target, but I think it gives a level of opportunity that we see. So yes, I mean, if we're successful in capturing a portion of that, yes, you can expect the Turnkey to grow.

Right. And then a follow-up is just looking at your chart at the back on your net cash backlog, you're saying there's $1 billion of net cash coming from Turnkey. So you've got $10 billion of backlog, teens margin. Just talk through the gap to that $1 billion of value. And obviously, tax is a big jump, but is there anything else I should be thinking of?

Yes. So you've got -- like also -- so in terms of like the net cash, we've got Longtail the initial -- some of the stuff associated with the feed in there. So that's like a bit diluted. And then you have the $1 billion net cash, but it's net of overheads. So -- which we've actually extended a bit because we added the SEAP awards. So they take longer. Obviously, we'll be aiming to add more awards in the coming period, which will then consume or offset, if you like, a portion of those overheads. So that's kind of in the mix. You need to -- if you're looking at kind of doing a gross margin type of calculation, you have to add back roughly $100 million overheads a year.

Okay. Because obviously, clearly, you got $10 billion of backlog and you used to say $1 billion of capital value was just under EUR 1 a share, and that $10 billion is coming to EUR 5.

Yes.

And so the difference is that includes the corporate cost now?

No, it's not a corporate cost, it's the Turnkey overhead. So it's $100 million a year. So you've got like 6 years' worth of overheads there. So that's $600 million. So you're looking at $1.6 billion versus $10 billion including Longtail, for which there isn't any net cash in the backlog yet. And of course, we are always clear to mention we take a relatively conservative approach when we project forward the backlog and include a bit of contingency.

We are now going to take our next question, and this one comes from Jeremy Kincaid from Van Lanschot Kempen.

Congrats on the results. I'll start with two questions first. I saw in the release that there was unfortunately a fatality at one of your subcontractors in one of the Chinese yards. I assume that's one of the yards producing the Fast4Ward hulls. So I was just wondering what the impact might be for you? Could there be delays? Might you have to do an audit of that yard? And does that limit your ability to construct future Fast4Ward hulls there going forward? And then my second question is on the upgrade to your EBITDA guidance. I was just curious about the nature of some of these strong operational performance factors which drove the upgrade. How sustainable are they? Should that mean I upgrade my EBITDA forecast by $100 million out in FY '27 and beyond? And I've got two follow-up accounting questions after that, please.

All right. Thank you, Jeremy. So let's start with the fatality. So yes, so in the layers of how we contract to a subcontractor of a subcontractor very unfortunately suffered a fatality after an incident in one of our yards in China. This -- the way this is dealt with as any -- what we categorize as a Tier 1 event is a very thorough investigation. Obviously, when there's loss of life, this is also involved the authorities of the country in question, and we draw all the learnings from that, and we look after all the immediately impacted people, both in the external part of that equation and our own people that have been there and involved in those activities. So that's our first priority. And then, of course, there is a lot of lessons we can learn from any such event, and that takes some time so that we are in that phase now, we're working on the thorough investigation to see -- also in mind that we're -- keeping in mind that we expect to have growth in our operational activities in China going forward. We want to make sure we walk into that growth with the full set of learnings from this event. So that is the main focus. From an operational perspective, there is no impact as such on yard selections or capacity or schedules on any work out of this incident as a direct impact. This is an extremely unfortunate event, and our duty is to deal with that in the way the best practices are established. So -- but yes, so to the second part of your question, no, there is no impact other than that. Douglas?

Yes. Jeremy, so just packing up a bit on EBITDA. We've been very consistent with our guidance. And when we set the guidance from the beginning of the year, there were a number of risks and opportunities that we could potentially foresee. So we like to take a balanced view. I think it's fair to say so far this year, we have been successful in capturing a number of opportunities. And there, I would say the fleet has performed pretty well. And some of our contracts -- there are bonuses for uptime and various other performances. So we've been very successful during the first half in capturing those. Then on, if you like, the risk side, a percentage point in percentage of completion on the project, particularly at the scale of the projects that we're now building can have quite a material impact. And -- but what we've seen is the projects so far this year have gone very well. So that's basically what makes the difference. And now for the accounting.

Yes. Just picking up on the working capital question. The drag has been quite severe over the last 12 months. It was, I think, $500 million in the second half last year and then another $450 million this year. You obviously talked to timing on the S&O contracts and you've had some hulls which have been constructed. So I suppose my question would be, should we expect a similar level of working capital drag over the next 6 to 12 months as you are building more hulls and you do have more S&O contracts coming into the mix?

Yes. So we're very focused on managing working capital and associated liquidity. I guess one component to start with is, yes, if we -- as we add more FPSOs, then we're going to add on the -- like the operate side, if you like, more working capital. And obviously, when we're doing our tendering, we're kind of pricing in the cost of that. But like structurally, you have more FPSOs, you're going to have more in the operate phase working capital. Then on the Turnkey side, Sale and Operate. So over the lifetime of the construction process, we're aiming to run on average cash neutral. That's how we try to build things. But yes, of course -- yes, from time to time, you get these big timing differences. And then, of course, again, it depends on like new projects versus the rundown of old projects because at some point, even if you've got a working capital help at the end of the day after the project finishes, you need to pay the bills. So it's this like phasing, you will see. And then as you mentioned, yes, it's a strong market outlook. So as such, we're very comfortable in the investments that we're making. So with growth -- growth will increase working capital on an absolute basis and also because of Sale and Operate the volatility.

We are now going to take our next question, and this one comes from Thijs Berkelder from ABN AMRO ODDO BHF.

Congrats with the strong performance. First question is on your Slide 9 on your projects in execution, where Jaguar GranMorgu and Chalchi all according to the picture are more or less 1.5 year before delivery. So could it be that also GranMorgu and Chalchi more or less get finalized before end of '27? Then the next question is -- yes, question comment on Namibia. I wish Total good luck if they would make [indiscernible] because then delivery date probably will be 2 years or more later. But in case the project is not won, would you need to then move people again away from Namibia to other locations in the world? Then the third question is on Slide 17 on the cash returns, Douglas, you more or less said, well, at this moment, we're not yet updating our cash return picture, although you have won SEAP I and II and are close -- probably close to the award of Longtail, what is sort of reasonable to assume once, let's say, Longtail [indiscernible] and related to that, is it correct that in the backlog '27, there's nearly nothing for Longtail at this moment?

Okay. Sorry. So let's see, projects in progress. So I think our release has pretty clear date. So I mean, the most advanced project is Jaguar, right, with pretty much all our topside modules on board, and we are in the early commissioning phase for a start-up next year, and the other two are going to start up in the subsequent year, as per plan. We are very happy with the progress across the portfolio. On Namibia, so could you just get me back to the question whether or not -- I didn't catch all of it, if you could just repeat?

Yes. First, coming back on Jaguar and GranMorgu, the contracts are indicating that the transfer of the vessel is already taking place in Singapore or not or only after first oil because you have the first oil date there. It isn't the contract saying that, let's say, you already delivered to the client when leaving the port in Singapore. On Namibia, yes, what if, let's say, the SBM Offshore scenario on your people and preparations in Namibia should you not get the award from Total?

Yes. Okay. Thank you. So the Sale and Operate contract, so they transfer ownership at the [indiscernible] from the yard. And then we -- there is a warranty period thereafter. So that's standard. And then there's an O&M contract that comes into effect as we move into the operational phase following the offshore commissioning. On Namibia, we have a very small structure in Namibia. We believe in the Namibian outlook, and that is not just linked to Venus, but in general terms, it's -- we're hoping it will be a prolific market. So it's a team that works on mapping out the opportunities in Namibia and position us there for future growth there. So we're not linking directly our plan there with just the outcome of the Venus. This is more a strategic direction for the company as such. It's a very minimal cost with a high -- potential high upside to us. So that is that. And then the cash returns, Douglas?

Yes. So yes, like as I mentioned, we'll do an update. We're going to do it on an annual basis because then we don't want to do kind of H1 to H1 2032 type of thing. So to keep it simple, we do it once a year. But yes, of course, and already in our net cash backlog, we have SEAP I and II and subject to a Longtail going ahead, we would hope to add that. So as I mentioned, relative to H1, we're optimistic that the net cash backlog could be higher at the end of the year, which would then obviously convert into more available cash relative to the $2.1 billion minimum that we have so far. So yes, just to be clear, so we're pointing to the fact in the way that we say minimum on the one hand and then these new awards, there will be upside in terms of returns. And our policy is to link our shareholder returns to the backlog. So as that grows, we should be able to increase returns. So specifically, you asked about Longtail. In the revenue backlog, we got off Longtail, but we don't have it in the net cash backlog at the moment. So Longtail would increase the net cash backlog.

Okay. And maybe a final one for the record, whether you can indicate whether you have any real impact from the conflict in the Middle East on your operations or your assets under construction? And/or can you maybe repeat what your, let's say, maybe most crucial supplies are like turbines or so? That also for the record.

Okay. So Middle East, so we've assessed that in great detail since the start of this situation. We have no material impact of any sort on operational activities nor on, let's call it, recent awards that may -- where we're still going to go out and be very active in the supply chain. So for the record, we do not have.

And the most crucial supplies?

Yes. So the most crucial supplies in our general supply chain is typically rotating machinery where we always work on anticipation and it's not impacted by Middle East.

We are now going to take our next question, and this one comes from Quirijn Mulder from ING.

Two small questions. One is how large is the impact of N 'Goma extensions? And what is the potential for later on, let me say, after December 2028? And my second question is about your remark about Veolia. How concrete are these plans for desalination plants with the French player? And where is the idea? What's the place to build that? That were my questions.

Okay. Let me do a bit of on desalination and Douglas will talk about N 'Goma. So we work with Veolia on water treatment on many of our FPSOs. So it's about repurposing already known technology with them. We -- they are a leading water treatment company in the world. They have a big network of industrial relations in that space. We are very good on ocean infrastructure and modularized solutions. 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. So for now, this is in a technology-wise, it's a well-documented solution from a commercial and market-wise, that is where we're looking now and studying the size of that potential. And of course, it's about pace of execution, using -- leveraging the same partnerships for build and equipment that we have already existing in our supply chain. So it's really in line with the strategic thinking that we have also communicated to the past of really repurposing the existing solutions that are some of the building blocks of the FPSOs and leveraging the partnerships we have in the supply chain. So follow this one, it's exciting.

So N 'Goma, so that's a 2-year rough extension to 2028. So it makes a small but meaningful, I would say, contribution to the net cash backlog. And let's say, if you're generous with the rounding, it impacts the net cash backlog number, if that gives you a sense.

We will now take our next question. The next question is from the line of Philip Ngotho from Kepler Cheuvreux.

Just one follow-up question, and it relates to the comment on the Turnkey segment, the $100 million overhead, because I was just wondering how has that evolved over the years? So how large has the Turnkey segment grown? And also just maybe interested in number of -- if you look at the FTE split, so what is there now in Turnkey to get a sense of the size?

Yes. again, Philip. So I would say it's been pretty -- the overhead itself has been pretty stable, and we're very good at managing the overall complement of people and minimizing under recovery. So yes, pretty stable.

There are no further questions, Mr. Tangen.

All right. Thank you so much. Thanks to all of you that have engaged in the call today, and we look forward to sharing more information as the company progresses in the next quarter. Have a nice day.

Ladies and gentlemen, thank you for attending. This concludes the SBM Offshore event call. You may now disconnect your line. Have a nice day.

Ladies and gentlemen, thank you for holding, and welcome to the SBM Offshore First Quarter 2026 Trading Update Conference Call. [Operator Instructions] Just to remind you, this conference is being recorded. I would now like to hand the conference over to Mr. Charles Alby, Investor Relations. Please go ahead.

Thank you, Manana, and thank you all for joining us today. This call is being recorded and will be available for replay on the company's website. Today's prepared remarks will be delivered by our CEO, Oivind Tangen, followed by a Q&A session. Before we begin, I would like to point out the disclaimer at the bottom of our press release and remind participants that some of our comments today may include forward-looking statements reflecting SBM Offshore's view of future events.

These matters involve risks and uncertainties that could cause our results to materially differ from our forward-looking statements. The principal risks are described in SBM Offshore's 2025 annual report, which can be found on the company's website. Once again, we will welcome your questions after the conclusion of the prepared remarks. I will now turn the call over to Oivind.

Thank you, Charles. Good morning, everyone, and thank you for taking the time to join the SBM Offshore First Quarter 2026 Trading Update Call. I'm Oivind Tangen, CEO of SBM Offshore. And as always, I'm joined today by our CFO, Douglas Wood. Starting with our performance over the last quarter. Our teams delivered a solid start to the year, driven by continued strong performance. For the first quarter of the year, we are pleased to report Directional revenue of $3.5 billion, an increase of over 200% compared with the first quarter of 2025, mainly driven by the FEED contract award for the Longtail development project and additional scope of work secured over the period. We've increased our directional revenue guidance for the year from around $6.5 billion to above $6.9 billion.

Additional upside for revenue will materialize to the extent we are able to finalize new awards. Our performance reflects disciplined execution and operational excellence and underscores the resilience of our business model. Based on what we know today, we do not anticipate a material impact from the current geopolitical situation, including tensions in the Middle East on our operations, projects or financial position.

Moving to the execution side. Our turnkey portfolio is on track with our 3 projects under construction progressing as planned. On FPSO Jaguar for our client, ExxonMobil, the topside fabrication is nearing completion and the topsides module lifting campaign along with their integration continues to progress well. First oil is expected in 2027. The keel laying milestone has been achieved for the hull of FSO Chalchi for our client, Woodside. Both the disconnectable turret and topside fabrication continues to progress well. Finally, on FPSO GranMorgu, for our client TotalEnergies, the work on the Fast4Ward hull and the topside fabrication continues per plan. First oil is expected in 2028.

On to operational excellence, our strong performance achieved throughout SBM Offshore's fleet resulted in uptime of around 98% at the end of the first quarter, which means safe and reliable operations for our clients and predictable long-term value generation for our shareholders. By combining our industry-leading Fast4Ward program with our integrated life cycle approach and disciplined execution, we continuously improve our ability to deliver large and complex deepwater solutions, both on schedule and within budget.

This reinforces SBM Offshore's strong position in a robust FPSO market that is increasingly characterized by projects with significant gas handling requirements. Thanks to this expertise, we were awarded in March the FEED contract for the Longtail development project in Guyana. Subject to final investment decision and government approvals, this project would result in the construction of an FPSO with the highest gas handling capacity ever deployed. Similarly, the 2 FPSOs in the Sergipe-Alagoas basin in Brazil for which we are currently tendering are designed with substantial gas processing capacity and the commercial process is progressing well.

The integration of gas treatment and export infrastructure enhances the overall value of the development by monetizing gas alongside oil production and represents a step forward in the treatment of gas on board SBM Offshore's FPSOs. Considering the robust market outlook, we've ordered 2 additional Fast4Ward hulls to support ongoing tender activities. Of the 4 hulls on order for future projects, one has been allocated to support the Longtail development projects in Guyana for our client, ExxonMobil.

Given our confidence in the FPSO and broader ocean infrastructure market over the long term, we are also working towards the replacement of our joint venture-owned installation vessel towards the end of the decade. The new vessel will enable us to maintain our full life cycle EPCIO offering and to create additional competitive advantages to improve reliability and the integration of more offshore installation work scopes. This, in turn, reduces execution risk for our clients and improves predictability of our EPCIO schedule and costs.

Looking ahead, we will continue to advance our core FPSO business, while selectively expanding into ocean infrastructure opportunities across the blue economy, deploying our proven capabilities where we see attractive growth opportunities. Now to the financials. For the first quarter of the year, the company's Directional revenue increased by over 200% to $3.5 billion compared with the same period last year, driven by Directional turnkey, which stood at $2.9 billion. The year-on-year improvement reflects the sale of FPSO ONE GUYANA in February 2026 and the allocation of the Fast4Ward hull to the Longtail development project.

This was partly offset by the delivery of 3 FPSOs last year, which contributed in 2025, Almirante Tamandare, Alexandre de Gusmao and ONE GUYANA. Directional lease and operate revenue stood at $610 million for the first quarter of 2026, a 28% increase compared with the year ago period, reflecting the 3 FPSOs that were delivered in 2025, while FPSO Aseng and the semisubmersible floating production unit Thunder Hawk left the fleet in the fourth quarter of last year. The sale of FPSO ONE GUYANA enabled further balance sheet deleveraging and was the main driver behind the reduction in Directional net debt to $3.2 billion as at March 31, 2026.

This represents a 43% decrease compared with the year-end 2025. A large part of the debt is related to our projects in operation and considered nonrecourse. There is no refinancing risk related to this debt. Finally, regarding capital allocation. During the first quarter, we increased shareholder returns through $100 million cash dividend payable on the 13th of May and the launch of a $270 million share buyback program. In addition, an interim dividend of $100 million is scheduled to be paid in September 2026. In aggregate, this represents a 57% increase in returns compared with last year.

To conclude, our first quarter performance reflects SBM Offshore's capabilities and our leading position in the ocean infrastructure market. The results delivered this quarter clearly demonstrate the strength of our disciplined execution and the resilience of our business model as evidenced by increasing Directional revenue guidance for 2026, reflecting strong underlying performance and increased confidence in the project pipeline. Reaffirming our capital allocation framework with at least $2.1 billion of cash return to shareholders targeted over the 6-year period to 2031 with further upside potential.

Strong execution across our turnkey portfolio with FPSOs Jaguar, GranMorgu and FSO Chalchi progressing in line with plan. A robust market for large and complex FPSOs increasingly characterized by significant gas handling requirements, supporting a strong tendering pipeline across key regions. Continued balance sheet deleveraging, providing financial flexibility to support near-term Lease and Operate opportunities. A strong focus on safety and operational excellence, delivering consistent high uptime across the fleet. This concludes today's call. Thank you for listening. Operator, we can now open the call for questions.

[Operator Instructions] First question comes from the line of Guilherme Levy from Morgan Stanley.

I have 2 questions, please. First one on Venus. Are there any new developments on that bidding process that you can share with us? And how should we read you ordering a new hull to the potential outcome of this negotiation? Secondly, thinking about the replacement of your installation vessel, how should we think about the capital commitment for this new unit and also the pace of capital deployment to build it? And just to confirm, this will continue under the JV structure, right? So continues to be a 50-50 investment?

And then thirdly, if I could squeeze in a third one. I appreciate that you are a bit late cycle compared to others. But following the recent development in the Middle East, thinking about the long-term opportunities in other regions, how global companies will look at their investment portfolio post these events? How do you think that we should expect the frequency of calls that you get from prospective clients to evolve over the coming years on the back of that?

All right. Thank you, Guilherme. So -- Venus, so it's an ongoing commercial process. As usual, we don't really comment on the specifics of that. We are excited about the opportunity and hope that we can be successful when it comes to conclusion. For the MPF ordering, that's a reflection of how we see the market evolve and the maturity of some of the discussions we're having on existing prospects. So no specific comments on the MPF, but it's a good indication on how optimistic we are about the market opportunities.

On the installation vessel, I will just reiterate that installation vessel is something we've had in the SBM capability over the last decade. It's always been both a technical add-on and a commercial parameter for us that's been successful that we want to continue as we see the ocean infrastructure play over the next decade. For the capital allocation, I will give that to Douglas once I will just comment on this, the Middle East. So the only thing we can comment on the Middle East is we don't see any exposure on our ongoing projects or operational activities either from a financial or a supply chain or an operational consideration.

Whilst in the consideration around what does it do to our market, I think that in the world is rather a growing focus on diversification of energy sources and -- rather strengthening the deepwater play in the Atlantic Basin, as one of those growth opportunities for further oil developments in that mix. So we kind of see it as a strengthening of our core market. So on the installation vessel, JV structure, negotiation, Douglas?

So it would indeed be structured as a joint venture. So similar kind of JV setup, similar dedicated financing, meaning as such, would have no material impact on the net cash picture. We're talking tens of millions for SBM that we showed in February over the next 6 years and the timing of kind of the process of building the vessel will be about 3 years. So it would fall within that 6-year window.

Our next question comes from the line of Philip Ngotho from Kepler Cheuvreux.

I have 3, if I may. The first one is on the guidance upgrade. I was just wondering if you could maybe elaborate a little bit on the revenue guidance increase also on the Lease and Operate segment. I understand that for the turnkey, it also probably related to the Longtail, FEED. But I was wondering what is driving the L&O upgrade? And also maybe just on that on -- why there isn't an EBITDA guidance upgrade, given that you still expect $ 400 million higher revenue? And to what extent does it also relate to you not recognizing any earnings before you have completed 25% of a turnkey project. So just some clarification on that.

And then maybe also a question on the net debt. It has fallen materially since year-end. Can you help us understand how you expect it to progress the rest of the year, also given the new orders and ongoing shareholder returns? And then finally, the last question that I have. You mentioned as well, you made a reference in the press release that you're also looking at advancing or selectively expanding into adjacent ocean infrastructure opportunities across the blue economy. It seems like it's a little bit more prominent than in earlier previous press releases. Is there anything that's in the pipeline there that you're looking at from a capital allocation perspective? Those are my questions.

All right. Thank you, Philip. I think -- Douglas, I think this plays well into your quarter.

All right. So on the guidance, so indeed, Lease and Operate is up a little bit. That's a function of having agreed a little bit more reimbursable scope with some clients on a few FPSOs. As you noted and as we said, Longtail is really driving the overall increase, it's the FEED contract. So for a FEED contract, we just book the revenue relative to the cost. And then as anticipated when following FID that will then roll into the project and when -- we then start to earn a margin after 25% around that percentage of completion.

On the net debt, so the evolution is very much in line with what we expect and what we've factored in both to our net cash outlook and also the guidance that we've been giving around the leverage ratio of staying below 3x. Of course, there's a lot of activity at the moment. So you can expect a little bit of fluctuation up and down in terms of the direction of travel. There's no change to that sort of steady deleveraging over time. And again, we anticipate to stay below 3x.

Yes, maybe just a comment on the blue economy. So we -- and ocean infrastructure capital allocation so there is -- as you know, we're working on a number of ocean infrastructure solutions at the year-end. We talked around water and CCUS, carbon capture and storage as themes that we're working on. There are other things in the background. But from a capital allocation perspective, our approach is that we very much look to advance those based on studies for which we're paid. And then the base case for now for all of those solutions as we get an order, it will be on a kind of EPC basis. If there are any changes, we'll let you know, but that's basically the philosophy. So as of now, we don't anticipate any call on capital to fund that over and above the OpEx that we have for the teams that are looking at those things.

Our next question comes from the line of Guillaume Delaby from Bernstein.

One or 2 questions for you, Oivind. Since the beginning of the war, have you noticed when you speak with clients, what I would call a step change in their mindset. A few CEOs, who I had the chance to speak to over the past few weeks, have told me that when meeting with governments, there is now an urgent need to build new infrastructure of all types. So I just would like to get your own personal take on that.

And second question, which is about the 4 hulls. So there is 1 for Longtail, 2 probably for the 2 Sergipe Brazilian contract, 1 for Venus. So I think it would be reasonable to expect that you order further new hulls in the second part of the year. I'm not sure you are going to answer the second question, but at least I tried.

Guillaume, the conversations that we have with our clients are always kind of about development pace, managing the cost base, derisking projects and delivering reliably. So the nature of the discussion hasn't really changed because that's always what we seek to do. I think maybe the overall theme is when you look at us and our portfolio that we are not -- we don't directly subject to the Middle East exposure is really about reinforcing our existing value proposition. But as I said earlier, we -- there is not just talking to clients, but in general, in between the countries we interact with through partners, equity partners, et cetera, we see that there is a much stronger drive for securing energy, the energy mix into the future that gives us further substantiation to the longevity of oil.

And we know that the oil play is very much driven by deepwater, low cost per barrel, low emission factors and therefore, strengthens our value proposition. But these are long-term developments, less so influenced by months and weeks events. But overall, you could say from a macro picture, we see it as reinforcing our value proposition. And we keep looking for further ways to develop that through our advancing the core strategy. So it plays well.

On the hull, I think that's an assessment you make. We have, as always, on the back of ordering 2 new hulls. We said on the last quarter update as well that we will engage with the third yard for that. So we've expanded our ability to -- or our capacity for new hulls through that -- through those awards. So we keep at the same kind of risk tolerance, and we keep the same kind of level of readiness for new prospects. So we know there is a concentration of prospects through this time line right now, and we'll be comfortably able to go after further awards for hulls, as new prospects materialize. So I think we're well positioned for what's in our portfolio, and we're well positioned for the prospects ahead of us.

Our next question comes from the line of Jeremy Kincaid from Van Lanschot Kempen.

Just one question from me this morning on your decision to replace your installation vessel towards the end of the decade. Is the reason for this because that vessel is at end of life? Or is it because you need to improve the capabilities of that vessel to be able to service the broader ocean infrastructure market that you're looking to target?

Yes. Thank you, Jeremy. So it is indeed coming to -- after a very successful long life and a good partnership, we have with Solstad, coming towards that end. And there is -- it could successfully continue to install the infrastructure project we foresee into the future. But what we have -- so it's a replacement in that context that we see. But of course, we're building in new capabilities as we take the opportunity, while designing this new vessel to bring in all the learnings we've had through the long and successful life of the Normand Installer.

[Operator Instructions] We have one more question. And this question comes from the line of Thijs Berkelder from ABN AMRO ODDO BHF.

Strong Q1. Three basic questions. Can you confirm that the 4 hulls, you have under construction, are still with your existing yards, SWS and CMHI and not yet at the COSCO yard? Then secondly, can you confirm that delivery of the FSO offshore Mexico in principle is planned for end of '27 and/or maybe early '28. Then thirdly, can you explain how you are handling all the extra -- new extra work, which is now coming to you in terms of hiring of people? How much people do you need? How far are you in recruiting those persons? And where are you adding that personnel?

All right. So yards, MPF, so the 2 awards were in COSCO. So as I said earlier, that's the third yard. So we're doing currently one in SWS, one in CMHI, and we awarded 2 for COSCO. So that has expanded our capacity. On the delivery of the Chalchi, whatever dates we've communicated...

Yes. No, I can comment on that one. So as we said, it's progressing on plan, but we always align with the client in terms of timing. And so they prefer not to give a timing.

That's right. And on the preparedness of our organization for what could be a successful year and years ahead. When we go into prospects and hand over and make commitments to tendering, we always bid with high sort of organizational readiness to start execution. So the recruitment for the scope that is potentially right ahead of us is pretty much already concluded and the execution model is a standard execution model. So some will be led by Kuala Lumpur, some will be led in Rotterdam. All of it will be backed in substantial -- in a substantial way by our teams in Bangalore, and we are keeping a very sort of standard -- sticking with a standard project execution model with already well-versed project management team for each of those already allocated to the prospects we've put into the market. So it's a very well-advanced sort of growth process that we've worked on last year and the early part of this year for the prospects ahead.

Our next question comes from the line of Edward Donahue from One Investment.

A couple from my side. It's reference to you were saying through the presentation about the increased size, but also the word complexity used quite a few times with regard to the gas component of projects going forward. How has this sort of changed the sort of the risk management operating processes that you have in place and also looking down your supply chain and the build-out in the supply chain, the understanding of this?

And then how does that potentially have any implications with uptime profiles, adding a gas component? I'm not an engineer at all. So any help would be most welcome. And then the second question is just -- I mean, okay, going back to the Middle East, the impact of inflation or latent inflation building in the supply chain and therefore, contract structures and pass-through ability.

All right. Thank you. So gas handling, so maybe important to differentiate between sort of novelty technology and sort of gas handling volumes. So when we're talking about increased gas handling capacity, it's about sizing up what is already well proven technologies. It's about the scale of the assets and the throughput. So it's all within well-known and already sort of existing technology portfolio or assets. So it's more about scaling up and the ability to do that in an economic way.

And this, of course, leverages exactly the same supply chain and the same equipment manufacturers that we are already used to working with. So from a risk perspective or a, let's call it, operational availability and operational capability, this doesn't represent a significant step out for the company. And therefore, we don't consider it as a particular emerging risk from that perspective. So it's not business as usual because these are bigger and they will take that diligence into the gas system, but it's not creating a novelty for us from that perspective.

On the Middle East and the supply chain, so for what is the sort of Directional -- the direct impact on our backlog, we are inflation protected on most of our backlog on the operational contracts. And on existing projects that are the 3 projects we mentioned on this presentation, they are already significantly advanced and past the procurement part of the project phase. So it's really a build and these are all lump sum contracts and not really impacted by the inflation in the supply chain.

On tendering work, of course, when we put in tender work, we build in allowances and contingencies for unforeseen. So that is one part of our production. And we always bid on the high maturity of our engineering, which means we have a high maturity of the underlying supply chain offers we have to support our tender work. So we've assessed all of those, and we found that the situation today is well within the contingencies that we put in place on the commercial prospects that we put into the market.

There are no further questions, Mr. Tangen.

All right. Well, thank you so much for joining us today. As always, if you have further questions, our teams are there, and you can contact them directly. Thank you for your interest in SBM, and have a great day.

Ladies and gentlemen, thank you for attending. This concludes the SBM Offshore event call. You may now disconnect your line. Have a nice day.

Ladies and gentlemen, thank you for holding, and welcome to the SBM Offshore Full Year 2025 Earnings. [Operator Instructions] Just to remind you, this conference is being recorded.

I would like to hand the conference over to Mr. Oivind Tangen. Go ahead, please.

Thank you, operator. Good morning, everyone, and welcome to the SBM Offshore full year 2025 earnings call. I'm Oivind Tangen, CEO of SBM Offshore, and joining me this morning, as always, is our Chief Financial Officer, Douglas Wood. We appreciate you being with us today, and thank you for your interest in SBM Offshore's journey and progress. Please note the disclaimer.

All right. Putting 2025 behind us, we are entering 2026 with discipline and momentum. Our strategy to advance our core and pioneer more is unlocking profitable growth powered by more than 60 years of deepwater ocean infrastructure capability, which today is playing out in a hot market. We are strengthening returns in our core portfolio through our focus on excellence in our ocean infrastructure solutions, promoting decarbonization and increasing efficiency of oil and gas production while opening new value pools across the blue economy by applying our deepwater capabilities to new markets.

With a resilient backlog and the commitment to execution excellence, SBM Offshore is set to continue to deliver meaningful value for our clients and shareholders, thanks to our infrastructure capability. We are strengthening returns in our core portfolio, and at the same time, gently positioning for the long-term future through diversification in other ocean infrastructure markets. 2025 was a year of strong delivery for SBM Offshore. Our teams continued to raise the bar by starting up 3 of the world's largest and most complex FPSOs within just 6 months. This performance is also reflected in our financial results with directional revenue reaching $5.1 billion and a directional EBITDA of $1.7 billion.

Thanks to this performance and factoring in the early purchase of FPSO One Guyana this month, we are increasing our cash return by 57% year-on-year to a record $2.57 per share. Over the next 6 years through 2031, we expect to return a minimum of $2.1 billion to shareholders with further upside potential. The start-up of FPSOs on Almirante Tamandaré, Alexandre de Gusmão and One Guyana in 2025 made a material contribution to increase global deepwater oil supply. The SBM fleet now stands at 16 units, delivering just under 2 million barrels of oil per day.

Bringing 3 large FPSOs on stream in such a short time frame speaks to the strength of our project execution model, the derisking achieved through standardized design and the value of a life cycle operating model. With the delivery of these 3 units, we have freed up capacity for new projects, and we are well positioned to capture opportunities with 16 prospects in our sweet spot in the coming 3 years. So we are positioning for growth by advancing our excellence journey to consistently deliver responsible, innovative and competitive solutions to our clients.

And with 2 Fast4Ward MPF hulls in hand, we are maintaining disciplined readiness prepared to move when the right opportunities arise. In 2025, with the 3 units, we delivered around 45% of all new deepwater production capacity in the world. FPSOs Almirante Tamandaré, Alexandre de Gusmão and One Guyana were brought online in only 6 months from February to August, adding a combined 655,000 barrels of oil per day of production capacity. This pace of delivery reflects the strength of our Fast4Ward approach and experience of our teams across the life cycle.

These units also achieved industry-leading start-up performance with an average flare-out of the gas in less than 50 days. The successful start-up of these 3 FPSOs is the fruit of our focus on continuous improvements. Learnings are translated into tangible application at each phase of an SBM Offshore asset, design, construction, commissioning, operation and decommissioning. Powered by Fast4Ward, our core business is built for lasting performance with safety and reliability as our top priorities. Across our fleet of 16 units, we delivered over 99% uptime, reflecting the commitment and expertise of our teams worldwide. We are today the world's largest contractor by global oil production capacity.

This includes the outstanding performance of our units in Guyana, where the debottlenecking of processing facilities has increased production capacity by over 100,000 barrels of oil per day, bringing total production for the 4 units to almost 860,000 barrels of oil per day in the fourth quarter of 2025. Our reliability and operational excellence matters. We produce approximately 2% of current global oil production with a capacity of 2.7 million barrels of oil per day and over 4.1 billion standard cubic feet per day of gas handling capacity.

To further optimize reliability and operational excellence, we have entered into strategic collaboration agreements with Cognite and SLB to develop an AI-powered digital ecosystem, which will enable further improvement in our asset management capabilities over the full FPSO life cycle. Through our Fast4Ward program, we are consistently and reliably delivering units at pace and at scale. In just 3.5 years, we brought 6 Fast4Ward FPSOs online, which combined production represents about 12% of total deepwater production at the end of 2025.

The sustained need for energy continues to drive demand for oil and gas. As supply from existing fields naturally declines over time, new developments and especially deepwater FPSOs will be required to bridge the supply-demand gap. In addition to oil, gas plays a crucial role in meeting global energy needs. Modern deepwater FPSOs are equipped with enhanced gas processing and handling capabilities. These improvements help reduce flaring and emissions, and in some cases, provide supply of natural gas for power generation and industrial use onshore.

As the industry evolves, gas handling capability has become a key driver in the design and deployment of FPSOs, ensuring both environmental performance and operational efficiency. The deepwater segment is competitive with lower cost of supply compared with other sources and demonstrates lower emissions intensity, especially for the newbuild FPSOs. This double resilience positions deepwater production to continue to expand, and the expectation is that for the remainder of this decade, 35% of new oil production is expected to come from deepwater developments.

On the back of that, we see a resilient pipeline of opportunities in our market of large and complex FPSOs. Over the past decade, there has been a structural rise in the number of FPSOs deployed in ultra deepwater with the number of units doubling between 2015 and 2025. In the same period, we see a consistent trend in the increased size of FPSOs driven by the need for higher gas handling capacity and greater processing capacity with the weight of topsides growing threefold over the past decade. Due to the level of complexity of these deepwater projects, implementing a standardized approach like Fast4Ward helps to lower schedule risk, manage costs reliably and improve quality of the product delivered.

With our proven capabilities, we are ready to capture our share of the market in the Atlantic Basin. SBM Offshore's Fast4Ward approach of new build standardized FPSOs have proven its success, and we've delivered 6 Fast4Ward projects over the past 3.5 years. Benefiting from the full life cycle of learnings now with 6 units in operation, Fast4Ward is not just a standardized product. It is also a way of working, providing predictable outcomes, ensuring on-time delivery, on budget, operational excellence, creating value for all our stakeholders.

On the back of the successful delivery of 3 FPSOs in 2025, we now have 3 major projects under construction in our turnkey portfolio, FPSO Jaguar for ExxonMobil, FPSO Trion for Woodside and FPSO GranMorgu for TotalEnergies. All 3 projects are progressing well and remain on schedule with overall portfolio progress currently at approximately 40% completion. In anticipation of new projects, we have strategically invested in 2 Fast4Ward MPF hulls to support ongoing tender activities. We have slot options available in our partnership yards and extended our collaboration with the third yard for further flexibility.

We maintain our in-house capacity for 6 projects in parallel with additional execution model alternatives available, allowing to increase this capacity. We are ready to grow our portfolio. As land-based solutions face increasing challenges such as grid congestion and limited coastal space, ocean infrastructure is emerging as a scalable and strategic alternative. By modularizing and marinizing industrial processes, we enable energy and industrial activities to expand into areas where traditional land-based systems can no longer keep pace. Ocean infrastructure solutions are modular, standardized, flexible and scalable, fully aligned with our Fast4Ward philosophy.

This approach allows us to diversify and deploy proven technologies efficiently, including carbon capture, storage solutions, lower carbon power, blue ammonia production and freshwater generation. And as you can see at the bottom here, we are positioning to create tangible options in these new ocean infrastructure markets. Our life cycle asset management capability is built on more than 60 years of offshore experience. This deep expertise, combined with our commitment to standardization, enables us to deliver high-performance solutions that support a more sustainable future while remaining disciplined in how we assess opportunities for global deployment.

With that, over to Douglas for our financials.

Thank you, Oivind, and good morning, everybody.

Our strong performance in 2025 with revenue of more than $5 billion and EBITDA of over $1.7 billion reflects the great execution capabilities of our teams on a portfolio which is growing. As you just heard, the market outlook remains very positive. Following last year's deliveries, we have capacity to reload and further grow our backlog after materializing strong revenue and cash flow in 2025. As a result of this, our order book stood at $31.1 billion at year-end, from which we expect to generate $8.4 billion net cash. We'll look at the outlook for the backlog in financial terms in a minute. But as you know, growth will be driven by shorter cycle sale and operate awards, which will mean our balance sheet will continue to delever as we pay down existing project debt.

So net debt at the end of the year was slightly lower than the previous year, but with the sale of One Guyana a few weeks ago, this has dropped by $1.7 billion. Factoring that in on a pro forma basis would make it $3.9 billion with a leverage ratio a bit higher than 2x 2025 EBITDA. The strong performance in 2025, headroom in the existing backlog and sale of One Guyana are the drivers of the evolution in shareholder returns, where we're increasing our aggregate cash return by 57% to $440 million or $2.57 per share. And within this amount, there's a one-off component of $100 million from the fact that we're moving to an interim dividend in 2026.

So taking this into consideration, for the 6 years to 2031 inclusive, this would result in a minimum aggregate return of more than $2.1 billion. I'm going to explain all the details in a bit, but first, to review the results for 2025 in more detail. Starting with the backlog. This was $31.1 billion, reflecting the strong revenue and cash generated in a year of delivery for the construction portfolio. The extension of FPSOs, Mondo and Saxi and Angola has been incorporated, including the initially approved brownfield scope. However, this was more than offset by the fact that the early purchase of One Guyana means we will not receive the previously assumed remaining charter revenue up to the end of the maximum charter period, which was August 2027.

Moving to net debt. As I just mentioned, this was slightly lower at $5.65 billion, with the impact of scheduled repayments, partially offset by final drawdowns under the facilities for existing projects. But again, as of today, this is a further $1.7 billion lower following the One Guyana sale. Then to revenue, which was close to $5.1 billion compared with $6.1 billion for 2024. As you recall, the sale of FPSOs Prosperity and Destiny had a very large impact last year, more than $1.7 billion, plus there was also a material impact from the sale of 13.5% of Sepetiba. So if you normalize for this, underlying revenue was higher in 2025. And the biggest contributor to revenue was turnkey, nearly $2.8 billion compared with more than $3.7 billion in 2024.

But again, normalizing for the prior year impact of the FPSO sales, the main driver was a higher full year contribution from the Jaguar and GranMorgu projects, which were just starting construction in the year ago period. On the lease and operate side, revenue was around $2.3 billion versus nearly $2.4 billion in the prior year. Here, the contribution from the 3 new vessels, which commenced operations over the year was almost sufficient to offset the reduced contribution from FPSOs Prosperity and Destiny as these moved to an operations and maintenance-only basis following the sales at the end of last year. And turning to EBITDA, this was over $1.7 billion.

That's ahead of guidance, mainly thanks to the sale of the Thunder Hawk platform right at the end of the year. And this compares with around $1.9 billion in 2024, whereas per revenue, there was a significant more than $600 million impact from the FPSO sales. Breaking down the parts, turnkey EBITDA was $561 million compared with $724 million for the previous year. Similar to revenue, on a normalized basis, thanks to the impact of the sale and operate model for Jaguar and GranMorgu, turnkey EBITDA was significantly higher. Then lease and operate EBITDA was around $1.24 billion compared with $1.26 billion in the year ago period, the drivers being the same as for revenue.

Finally, other EBITDA was $87 million negative, an improvement versus $89 million negative last year as a result of lower G&A costs. Moving to cash and the backlog. On a net cash basis, this stood at $8.4 billion, with the evolution since the half year, reflecting continued strong cash flow generation with a smaller impact from the difference between the Kizomba C extension initial scope and the reduced One Guyana charter. And just to be clear, the dark blue bar on the left includes all the backlog elements, so that's lease and operate and turnkey, including the One Guyana purchase. And then we play this out over time in dark blue on the right, where you can clearly see the One Guyana impact this year.

Now having delivered 3 vessels last year and in the context of a very robust outlook, we have the capacity to take on new projects and grow the order book to maintain a strong level of cash flow going forward. So to give a sense of this near-term potential, in light blue, we've added a model scenario on top of the existing net cash backlog of a range of up to 2 large FPSO awards per year on a sale and operate basis for the next 6 years up to 2031. And in this, we've incorporated an additional allowance for turnkey overheads up to 2034, which would be the delivery year for awards secured in 2031. For the purposes of the scenario, we've assumed a $3.5 billion value per FPSO, and then we've also played out the O&M phase.

Now this will vary per contract in reality, but we've used a period of 10 years per award, assuming extension options in case of initially shorter-term contracts. It's not a forecast, but it frames the perspective we have on significant near-term sale and operate cash potential, underpinned by still very material long-term equity cash flow from our lease portfolio. We picked 6 years as this aligns with the short-term window we use for giving the outlook for returns, which we're going to look at in a minute. But important to note here that we're not planning on shutting up shop and running down the business in 6 years and are confident of more to come thereafter.

Looking at the oil and gas demand scenarios you just saw, we expect to see further FPSO awards beyond the end of this decade, plus then additional growth from diversification into other ocean infrastructure solutions, as you heard from Oivind. So we've illustrated this with further waves of awards to the right of the modeled near-term scenario. Then in the chart on the top right, we have the usual euro per share analysis of the backlog at a range of discount rates, where we've also included the light blue modeled near-term scenario on top. Assuming the majority of new awards follow the sale and operate model, our net debt is going to continue to trend downwards beyond the end of the decade.

And we foresee our leverage ratio being below 3x going forward. But in the shorter term, we have some near-term sale and operate opportunities that may require construction financing. So that's driving a bit of conservatism in the leverage ratio forecast. Next to cover returns. The strong 2025 performance, headroom in the existing backlog, the acceleration of the sale of One Guyana and the perspective we have on growth are the key factors in the determination of the cash return to be paid in 2026. Under our shareholder return policy, we aim to pay a stable cash return, which grows over time linked to growth in the backlog.

We have flexibility to pay a portion of our annual cash return as a share repurchase in combination with a dividend, and we maintain the option to apply surplus capital for incremental returns on top of this. In 2026, we intend to pay an aggregate $440 million cash return. That's an increase of 50% compared with 2025, and that represents a cash yield of 9%. This corresponds to $2.57 per share and has 2 components. Firstly, an aggregate cash return of $340 million, comprising a share buyback of $240 million plus a dividend of $100 million for 2025 to be paid in May. Then we're introducing an interim dividend to provide a more regular income to investors.

This drives an additional introductory year 2026 interim dividend of $100 million to be paid after the 2026 half year results. The buyback component comes from a $270 million share buyback program with the incremental $30 million relating to employee share plan requirements. As normal, shares repurchased as part of the cash return will be canceled. Now as we've highlighted before, in order to allow a tax-free buyback, Dutch fiscal rules require an aggregate dividend in any fiscal year equivalent to the average of the last 7 years dividends after excluding the highest and lowest years. So that's what's driving the aggregate dividend amount of $200 million to be paid during 2026.

Now $340 million will be the baseline for the cash return in 2027, where the formula will require a minimum dividend approximately similar to 2026, which we will pay in 2 installments with a buyback program on top. So we're making good on our promise of delivering upside on an already very robust level of returns. Now projecting forward for the next 6 years to end 2031, the proposed cash return for 2026 would lead to a minimum return of more than $2.1 billion. But here, we contextualize this versus the net cash we expect to generate from the backlog during this period, on top of which we show the impact for the 6-year period of the modeled scenario range we saw a few slides ago.

And from this, we have to cover 6 years of corporate overheads, where based on the growth we see, we're now guiding at $80 million per annum versus the previous $75 million guidance. This is then around $500 million. And to note, we already covered all of the $300 million net equity investment remaining at the beginning of 2025 during the course of the year, and we don't see the need for any significant net equity investment at this point based on the fact our tendering pipeline contains only sale and operate [ projects ]. So as you see here, the $3.1 billion we have in the backlog is sufficient to cover the overheads plus the increased aggregate cash return, leaving an incremental $500 million.

Now looking back, based on today's cash return increase, we'll similarly return a minimum of almost $2.1 billion for the 6 years 2025 to 2030 versus the initial $1.7 billion guidance we gave last year. That's a payout of 75% of the available free cash capacity, which existed at the start of 2025. Here, based on our confidence in securing new awards, we have increased the payout ratio of currently available free cash for the next 6 years. But as you can see, there is an opportunity to significantly grow this via new awards, and in turn, to further increase returns. Finally, to update you on our guidance for 2026.

2026 directional revenue guidance is a baseline of around $6.5 billion, of which around $2.2 billion is expected from the lease and operate segment and around $4.3 billion expected from the turnkey segment. 2026 directional EBITDA guidance is a baseline of around $1.8 billion. Now we use the word baseline as we have not included any potential new FPSO awards. So we'll update the guidance to the extent these are secured, noting that while new awards would have a material impact on revenue in 2026, there will likely only be a minimal impact on EBITDA given that we only book margin after the 25% completion stage.

That's it for me. Now back to Oivind to conclude.

Thank you, Douglas. Very thorough, very clear.

So in conclusion, we are extremely proud of what our teams have delivered and continue to deliver. This allows us then to successfully advance our core with 3 major projects brought online in Brazil and in Guyana, continue to execute and operate with excellence and through that, drive strong financial performance, which again allows us to increase our cash returns for 2026 by 57% and expect to deliver a minimum of $2.1 billion over the next 6 years, as Douglas has explained, with upside potential from the existing backlog and potential new awards. We are well positioned in a strong deepwater market and with capacity free, we are ready to grow our market share.

And lastly, we are positioning ourselves in a blue economy, pioneering more beyond FPSOs, applying our capabilities and unique offshore experience to diversify and develop innovative ocean infrastructure solutions that address global challenges. I would like to close by thanking our clients and stakeholders for their continued support. And to our teams around the world, these results are yours. Your dedication to our strategy is what enables us to create value together.

Thank you all for listening. We're now looking forward to your questions.

[Operator Instructions] Our first question today comes from the line of Guilherme Levy from Morgan Stanley.

The first one, if I may. Now that you have split your dividend payments in 2 installments over the year, depending on the outcome of orders in the first half, would you be willing to revise upwards your dividend payment for the second half? Or does the guidance from today on dividends is defined and set on stone and any adjustments should only be expected from next year? And then secondly, just thinking about your EBITDA guidance for the year.

I know that you don't provide a breakdown between turnkey and lease and operate. But I was wondering if you can provide some color even if just qualitatively on 2 aspects of the turnkey division. Firstly, if you can say a few words on contingencies around projects under construction. And then if you can just help us try to strip out the one-off effect of the One Guyana sale that you are embedding in these numbers.

All right. I'll -- there's a lot in Douglas' court there. I'll let him go.

Yes. Guilherme, thanks for the questions. So dividends, I think we're really looking at $200 million split in two for this year. That's the base dividend. And so I don't see the dividend amount changing this year. I think another comment I would just make overall, you saw from my presentation, there's existing upside in the backlog and then there's more upside from growth in the future. But I think you can see we've done that this year with the sale of One Guyana, we like to kind of pace the returns with the delivery of the cash. So that probably give you a bit of flavor of where we stand there. Then on the guidance, I think overall, we're very happy with our guidance. It's an increase both on EBITDA and revenue versus this year.

I think it will actually be a record for revenue. And again, it includes no impact from future awards. So at least on the revenue side, there's some upside there. To give a bit of a sense of some of the dynamics that maybe should think about between 2025 and 2026. Clearly, there's a big impact from One Guyana. There, we get a big boost on the turnkey side. But as we guided when we did the trading update in November, it also means that we sold the asset. It's now on an operation and maintenance-only basis. So we lose quite a large element of charter. So to give you a sense, roughly net of everything, that's a $200 million EBITDA impact, positive, just to be clear.

But then on the turnkey side, things to think about this year 2026 versus last year 2025. So we had the finalization of Almirante Tamandaré and ADG. So they had a bit of impact on turnkey EBITDA, which obviously we won't see this year. And then I think you could say Jaguar and GranMorgu, 2025 kind of peak time. So we'll get a good contribution from them next year, likely a bit lower. And then obviously, there were no big awards of the kind that we go after in the market last year. So we were -- we've only really got revenue upside, which we haven't accounted for in our guidance. But if we win awards this year, then we should see some benefits on the EBITDA side from 2027 onwards. I hope that helps.

Our next question comes from the line of Thijs Berkelder from ABN AMRO ODDO BHF.

Compliments with the strong performance. Three questions. Can you give us an update on timing and talks progressing on the SEAP II and I FPSO bidding/contracts? Secondly, if I look at your Slide 31, you seem to clearly hint for margins in turnkey going up in the coming years. Can you explain in the bars what levels we are talking about? And third, a smaller one, N'goma FPSO extension option. Eni last week announced new flow coming to the N'goma FPSO. So does that mean that the extension option probably will be used?

All right. Thijs, thank you for your compliments. We will relay them to our teams that are listening maybe. Question 1 and 3, I will deal with. So timing on SEAP II and I, as you saw Q4 last year, we were the lowest bidder on these 2 prospects, and the dialogue is ongoing on those. I think it would be -- everyone is interested in those. That dialogue coming to its conclusion in the near term, but these are significant contracts. So we're working through that step-by-step, hopefully, to a positive outcome in the not-too-distant future.

I don't have more -- the timing is entirely on our client side. Regarding N'goma, so N'goma's charter comes to an end at the back end of this year. It has extension opportunities fixed in the contracts. And then as soon as our client, Azule may activate those, we will update the market accordingly. But we like to think that Block 1506 has a lot of good potential in it. Then on gross margins, Slide 31, Douglas.

Yes. So that's not a sort of subtle hint for the future in terms of kind of the long-term locked-in margin. But of course, it reflects the reality of this year. I think one of the things we've been talking about since the emergence of the sale and operate model is that we expect to see a bit of volatility depending on the phasing of different projects in the mix. So we had saw quite a steep level of progress on the 2 major projects that we have in the construction or FPSO projects we have in the construction portfolio at the moment.

We also benefited as well from strong project finalization in 2025. And by that, I mean we didn't use all the contingency in all the projects. So that provided a bit of a boost. But I think if you want to think about margins, it's better to sort of think about the historical numbers. So we're not just for the record guiding on 25%. That's not what we unfortunately expect to consistently do in the future.

Our next question comes from the line of Jeremy Kincaid from Van Lanschot Kempen.

Two questions from me, please. The first is just on your cash flow and cash position. On Slide 16, you have the helpful chart, which shows you're expecting $3.1 billion of net cash to come in. Is that on top of the $700 million of cash you have at the corporate level, which would then suggest you have the $0.5 billion plus, $0.7 billion of cash, which is effectively unallocated.

Okay. I can take that one straight away, Jeremy. So yes, it doesn't consider the cash we have on the balance sheet. So that's a potential upside in the future. But what you need to remember, and we do think about this very carefully when we do our forecast, some of that cash is, if you like, spoken for. So we will have some working capital to pay off, et cetera. We have some milestone payments. So you need to think about that as well.

And how much do you think that should be?

We're not going to give a guidance on that, I'm afraid. But what we can say is while we're very clear that the forecast we're looking at on this page, it doesn't include working capital movements, of course, we do think about future working capital movements to make sure that we're not kind of misrepresenting the reality in the future.

Clear. And then my second question is just on your ability to scale and grow. You obviously said that you have slot options available with your partnership yards. How many slots are available? And also, you said that you have in-house capacity for 6 projects, I believe, but there was also the comment around additional execution models available. Could you give us an idea of what other execution models could look like?

Yes. No, that's good. So on the yard front, so you know we've been working consistently with SWS and CMHI in China over the last decade on the MPF, so 10 in numbers so far. And then as we -- we plan for capacity in accordance with how we see the market evolves. So going to a third yard COSCO is then a strategic choice to sort of broaden the capacity path in what we see as a very strong market. So it's a very well-known yard to us. We did the major works on the ADG project. So that is positioning.

So the number of slots is something we have -- we are in continuous dialogue with these yards to give the best line of sight, and we sort of calibrate that in an ongoing conversation. So that is a varying numbers. But needless to say, we project a couple of years ahead to help the yards also plan their capacity, and then we update continuously. So I'd say from a yard capacity, hull capacity, we are comfortable to be able to execute any of the prospects that we are pursuing.

When it comes to our in-house capacity, that is about managing the fixed cost of our organization. And another advantage of owning your own standards, standardization and having a very well-established and mature execution model is that you can bring scope outside of the organization in a very controlled way. You could do that either by subcontracting engineering hours of a more transactional nature to then partnership engineering houses or you can do another model more of a partnering in terms of carving out scope like we've done on One Guyana with McDermott, or we've done on B58 with Technip Energies.

So these are proven models, proven partnerships that we can deploy if we see that there is an opportunity we would like to pursue, it fits our sweet spot and that we, in a controlled way, can then allocate scope outside of the SBM fixed capacity. But that is -- so those are secondary and tertiary operating models that we can deploy without introducing any kind of significant risk to the return levels of our delivery.

[Operator Instructions] Our next question comes from the line of Dirk Verbiesen from ING Equity Research.

Some questions still on the hulls. You have 2 hulls under construction. Let's say, the overall comments on prospects are becoming and remaining quite positive. So if I understand it correctly, there is enough room to maneuver in the short term as well once the SEAP I and II land potentially in the, let's say, in the not too long period and then the other prospects as such. And is the 16 you mentioned, just for understanding correctly, is that including the 2 from Brazil? That's my first question. And the other question I have is on your new solutions on Slide 10.

So let's say, in time to market, what is the most promising out of those 4 and also in terms of addressable market?

All right. So hulls. So we have 2 that we're building in anticipation that have well advanced. And as it stands today, 1 is no longer available in the prospect pipeline. And then we have hulls that we can activate very fast on as a function of the timing of potential awards under negotiation. So we have slots ready for activation that matches the time lines to derisk the project schedule of prospects currently under negotiation. So whether it's 2, 3 or 4 that we can apply to all of those scenarios over the coming year or two. Then on new solutions. So these are examples of derivative products of the inherent capabilities in an FPSO design today. So whether it's desalination, whether it is power barges, et cetera, these are products that we feel without introducing any kind of risk and leveraging our standardization and sort of build-to-scale ocean infrastructure products, these are products that we could bring to market as the market evolves.

Today, and let's be clear, there is no near-term market -- significant market opportunity that we consider to be material in comparison with the FPSO play. So in the -- up to the end of this decade, SBM will be a very sort of FPSO-focused, FPSO revenue-driven company. What we are doing, and keep in mind, we are partners and main subcontractors to many of the players that will be in the energy and ocean infrastructure plays, blue economy of tomorrow. And so we are promoting these products and potential products as a thinking, as a strategic thinking in those -- in the dialogue with these companies also to keep their mind on SBM as these markets develop, assuming that the IOCs will be also key players in that blue economy. And so it's more a positioning today.

It's more showcasing the inherent capabilities that integrates into an FPSO capability context. So let's -- we'll keep you informed as these markets evolve and as one of them may crystallize ahead of the others, but we like to think they can all have a realistic chance of becoming successful products in tomorrow's economy.

Okay. And as a follow-up on your pipeline and the, let's say, the future prospects on Slide 13, I think Douglas mentioned $3.5 billion as assumption for those FPSOs in turnkey value. So we should assume EUR 3.5 NPV per share is also the way going forward?

Yes. Dirk, so the euro per share guidance, it was EUR 2.5 to EUR 3.5. I think now you should think about that in terms of the value per share more EUR 2.5 to EUR 3, the reason being driven by the dollar depreciation. So that has a bit of an impact. So it's better to think about somewhere in the range of EUR 2.5 to EUR 3 per share. And that's what we've considered, by the way, in the modeling.

There are no further questions, Mr. Tangen. I will hand the call back over to you.

All right. On that note, thank you all for listening in and for your interest in SBM, and we will be available for further questions at any given time, obviously. And with that, I'll hand the word over to the operator, and have a nice day.

Thank you. Ladies and gentlemen, thank you for attending. This concludes the SBM Offshore event call. You may now disconnect your line. Have a nice day.

Ladies and gentlemen, thank you for holding, and welcome to the SBM Offshore Third Quarter 2025 Trading Update Conference Call. [Operator Instructions]

I would now like to hand over the conference to Mr. Charles Alby, Investor Relations. Please go ahead.

Thank you, Razia, and thank you all for joining us today. This call is being recorded and will be available for replay on the company's website. Today's prepared remarks will be delivered by our CEO, Oivind Tangen, followed by a Q&A session.

Before we begin, I would like to point out the disclaimer at the bottom of our press release and remind participants that some of our comments today may include forward-looking statements reflecting SBM Offshore's view of future events. These matters involve risks and uncertainties that could cause our results to materially differ from our forward-looking statements. The risks are included in detail in SBM Offshore's 2024 annual report, which can be found on the company's website.

Once again, we will welcome your questions after the conclusion of the prepared remarks. I will now turn the call over to Oivind.

Thank you, and good morning, everyone, and thank you for taking the time to join SBM Offshore's Third Quarter 2025 Trading Update Call. I am Oivind Tangen, CEO of SBM Offshore, and I'm joined today, as usual, by our CFO, Douglas Wood.

Starting with our performance over the last quarter. Our teams continue to deliver strong results in line with the plan. We are very pleased to report a directional revenue of $3.6 billion for the third quarter of 2025, up 26% compared with the third quarter of 2024. As a direct result of this strong performance, we have increased our EBITDA guidance for the year from above $1.6 billion to around $1.65 billion.

The increase reflects our ability to execute complex projects across the globe despite challenging global economic and geopolitical conditions with consistency and reliability. The remarkable performance achieved in all our regions of the lease and operated activities attests to the quality and efficiency of our operations with the fleet uptime standing at 99.4% at the end of the third quarter.

On the execution side, we have delivered 3 major units in 2025. After FPSOs, Almirante Tamandaré and Alexandre de Gusmão reached first oil in February and May, respectively, FPSO One Guyana successfully achieved first oil in August. These units have demonstrated excellent track records in terms of installation efficiency, pace to flare out and ramp up to full production. In October 2025, FPSO Almirante Tamandaré was producing 270,000 barrels of oil per day, well above its original nameplate capacity of 225,000 barrels of oil per day. This was achieved in less than 8 months after first oil. These 3 vessels bring the size of our fleet to 17 FPSOs with a total installed production capacity of 2.7 million barrels of oil per day and a daily production above 1.8 million barrels of oil per day increasing and increasing with further ramp-up ahead of us.

We continue to progress as per plan on our 3 turnkey projects. On FPSO Jaguar, the topside modules fabrication is progressing as per plan and first oil is expected in 2027. On FPSO Chalchi, following the first steel cutting milestone in the last quarter, construction activities are progressing as per plan, including the fabrication of the disconnectable turret mooring system.

On FPSO GranMorgu, engineering and procurement activities are well advanced and vessel work and topside modules fabrication continue to progress as per plan. Under the Fast4Ward program, a total of 8 hulls have been delivered, of which 6 are in operation and 2 have been completed and delivered to projects under construction. MPF hulls # 9 and 10 are under construction, supporting active discussions with clients driven by a strong FPSO market outlook in the deepwater segment.

We see increasing market activities -- activity in our key regions in the Atlantic Basin, and we continue to remain disciplined in pursuing only the highest quality projects in the market. Our recent tender submission for the SEAP 1 and SEAP 2 FPSOs were the most competitive bids in an open competition for Petrobras. These units are large and complex FPSOs with significant gas treatment facilities. This demonstrates SBM's industry-leading position and expertise of the market.

We're also pleased to share another milestone in our offering of floating solutions with reduced emissions. In September 2025, SBM Offshore secured the American Bureau of Shipping approval in principle for the design of a blue ammonia FPSO, marking a key step in the company's road map to contribute to the energy transition. By integrating carbon capture and ammonia production technologies, the design enables offshore production of low-carbon ammonia. This innovative design complements SBM Offshore's portfolio of solutions aimed at reducing greenhouse gas emissions and reinforces its strategy to bring to market more sustainable ocean infrastructure options for our clients.

The ambition to increase operational efficiency and improve asset life cycle performance has also prompted the signature of 2 strategic collaboration agreements in October with Cognite and SLB. These partnerships will enhance digital asset management of our fleet by deploying an AI-driven data platform designed to improve operations. Through our respective domains of expertise, we are elevating fleet performance to higher standards of safety, efficiency and reliability.

Now to financials. For the third quarter year-to-date, the company's directional revenue increased by 26% to $3.6 billion compared with the same period last year, driven by directional Turnkey, which stood at almost $2 billion, an increase of 90% or over $900 million compared to the same period in 2024. The year-on-year improvement mainly reflects the progress booked under the sale and operate model of FPSOs GranMorgu and Jaguar.

Directional lease and operate revenue was $1.6 billion, 11% below the same period last year due to the sale of FPSOs, Prosperity and Liza Destiny in Q4 2024. This was only partially offset by FPSO Almirante Tamandaré, Alexandre de Gusmão and One Guyana joining the fleet in 2025.

Our net debt position was $5.8 billion for the period up to September 30, 2025, a very slight 2% increase compared with the same period last year. This reflects a high level of activity and some temporary financing requirements between milestone payments under the sale and operating model.

ExxonMobil Guyana has indicated that it could exercise its contractual purchase option to acquire the FPSO One Guyana in early 2026, ahead of the end of the maximum lease term. This is a clear vote of confidence in our sale and operate model where we transfer ownership of the asset and continue to provide operation and maintenance services, leveraging the gains of SBM Offshore's Fast4Ward design and cumulative operating experience of our fleet.

An early purchase would result in an accelerated reduction of our total debt by $1.7 billion as the project loans will be repaid in 2026 and have a positive effect on the results and operating cash flow in 2026. This contract will then move to an O&M-only basis, in which case, we will update the backlog accordingly.

Finally, regarding cash return to shareholders, the EUR 141 million share repurchase program is progressing and was circa 71% complete on November 12, 2025. Following partial completion of the program, SBM Offshore canceled 5 million ordinary shares on November 3, 2025, representing 2.8% of the company's issued share capital. We remain on track to distribute a minimum of $1.7 billion for the period of 2025 up to and including 2030.

Given the strong market outlook I just mentioned, we would expect to add more projects in the coming years. And this, plus the flexibility that we have in the existing backlog means that we remain confident in our ability to grow our returns beyond the $1.7 billion.

To conclude, we're confident in our ocean infrastructure experience, the expert capabilities of our teams and the resilience of our business model. The strong results for this quarter clearly demonstrate that our dedication to excellence in every aspect of our work is a strategy that pays as evidenced by increasing the company's directional EBITDA guidance for 2025 to around $1.65 billion, reconfirming our existing targets to deliver a minimum of $1.7 billion cash return to shareholders until 2030 with upside from the existing backlog and anticipated new orders.

A strong market for new build large and complex FPSOs with tendering levels rising across key regions. Successfully delivering episodes on Almirante Tamandaré, Alexandre de Gusmão and One Guyana in a 6-month time span, all while maintaining high safety records and excellent uptime.

This concludes today's call. Thank you for listening. Operator, we can now open the call for questions.

[Operator Instructions] We are now going to proceed with our first question and the questions come from the line of Guilherme Levy from Morgan Stanley.

I have 2, please. The first one, if you can comment on the environment for new orders over the coming quarters. You have obviously placed the best bid for Petrobras SEAP FPSOs. And at the moment, you have 2 MPF hulls under construction. So also wondering how quickly could you order additional hull into next year depending on the progress that you make on the next orders and on the next bid?

And then secondly, if you can comment on working capital moves now in the fourth quarter? And where do you see your directional net debt falling into by year-end?

Thank you for your question. So new orders coming quarters. So we see, as I said, a very lively market. It's been coming for some period. We are active in discussions with, of course, Petrobras on the -- following the lowest bid on the SEAP 1 and 2. And then -- so we'll see and hopefully, we can achieve success on that. We are also, as we indicated before, in the bidding process of the Venus development for Namibia. And then we're seeing more in the pipeline in -- happening in Brazil and also we hope to see the Guyana pipeline continue to develop.

So I would say right now, from an MPF perspective, we have 2 under construction, and we are well positioned with slots for all the prospects we see emerging as well ahead of us. And in terms of award date, that is not in our court. That is really in our clients' court, but we do hope that both '26 and '27, we should be able to add to our backlog. Douglas, on working capital?

Yes. So especially with the new sale and operate model, it introduces a bit of short-term volatility because sometimes we need to bridge between milestone payments from the client. So that's basically the variable that we have depending on whether some fall just at the end of the year or slightly afterwards. But I would say, overall, we would expect then debt level to be stable or maybe a bit lower. As I project forward, though, just to reemphasize, the direction of travel remains that we're deleveraging in the context of the award landscape being sale and operate only.

So all of the projects, the lease and operate projects we have are continuing to pay down. And to the extent that the purchase from Exxon of One Guyana goes ahead, as Oivind mentioned in his remarks, we would see instantaneously a $1.7 billion reduction early next year. So yes, there can be some sort of swings as we go, but the trend to 2030 remains very consistent with what we've seen and we expect a significant deleveraging.

We are now going to proceed with our next question. And the questions come from the line of Philip Ngotho from Kepler Cheuvreux.

The first question that I have is on the recent announcement that you -- announcement of the agreement with COSCO construction of new hulls. Could you maybe elaborate a little bit on the thinking behind it, why you're adding another supplier and a partner to this? And is that related to just seeing more potential work or less capacity at your other partners that you're working with for the whole construction?

And the other question I have is more -- I've been also reading that there is more interest now also from financial institutions potentially looking to reengage again in the sector with financing potentially FPSOs. And maybe in that sense, the lease and operate model that might become a bit more attractive. How do you see that? Is it -- are you already seeing indications of that, that potential clients are actually also looking at more of lease and operate contracts?

And maybe the last point, I know it's early days, but if the sale does go ahead of FPSO in Guyana, and that means accelerated cash flow to the company. Would you also be considering doing additional share buybacks on top or special dividends in some form? Those are my questions.

Thank you. All right. So the first one, COSCO. So our strategy Fast4Ward and is about thinking ahead. And of course, as we said, we see a very good market ahead of us. And then we have -- I want to say we are very happy with the partnerships we have with existing MPF builders, SWS and [ CNHI ]. There is a lot of construction activity, not only in the oil and gas. So when we project forward, we obviously look at award rates and line it up with the capacity projections in our partnership yards.

COSCO is a yard. We had a very good development of our relationship there to the Alexandre de Gusmão project. And having an agreement on potentially also building MPF in that yard is just a way of anticipation and planning ahead on capacity needs. So it's a strategic move in line with our thinking over the last decade already.

On the other 2, I will leave Douglas answer that.

Philip, so on your first question about lease and operate. So I would say relative to the banks, I think we've continued to see a good level of appetite. So there are some banks that we were working with that pulled back, others came into the market. And you saw that on the Jaguar construction financing that we did, that was -- there was a lot of appetite for that was oversubscribed. So we still see a strong level of appetite there.

I guess the one thing that changed and does have quite big impact was the fact that most export credit agencies pulled back. But let's see, but I'm not seeing a lot of indications that, that is changing. And export credit agencies have had quite a role to play in the past for long-term financing, especially in places with below investment-grade rating, which is pretty much everywhere where we operate.

But that said, we've been working very hard to broaden the relationships with financial institutions to allow us to be very much in the long-term lease and operate financing market. You saw that we did the refinancing of parity with the Chinese leasing houses earlier this year. So that's one long-term opportunity.

And on the financing that we're working on at the moment for the Chalchi FPSO, we're looking there to do a multi-tranche financing, including infrastructure funding. So I think we still have a lot -- many tools that we can offer to be able to offer long-term lease and operate. As I mentioned, right now, all of the prospects that are in our kind of pipeline that we're pursuing are on a sale and operate basis, but potentially with maybe some softness in the oil price, clients -- some clients may appreciate a financing option. So we're ready there. And so I wouldn't say that it's the end of the lease and operate, and we're ready to support our clients with financing and looking to use that actually as our capabilities there as a differentiator to secure new awards.

Then you had the question about what's the thinking around the One Guyana purchase. But of course, we've been really focusing on that 6-year period from this year to 2030, the overall cash flows there, the $1.7 billion that we've committed and then there's upside beyond that just from the existing backlog of $1.1 billion in the existing backlog plus, of course, we're planning to win new awards. So One Guyana is then already because it was supposed to be purchased 2027 latest. That was already in the thinking. So it's kind of already there.

And as we mentioned, if we have an acceleration into 2026, yes, that means we'll get more money in 2026. we'll be able to repay the debt a bit earlier than previously anticipated. But then as Oivind mentioned, the contract changes to O&M. So that will mean for the remainder or going forward will be on an O&M basis. And then for the period up to 2027, we won't have the charter that was currently in the backlog. So there's kind of pluses and minuses in the whole equation there. As Oivind mentioned, the $1.7 billion is a minimum. We're looking to -- we see upside in terms of returns, we should be able to deliver this timing of the purchase doesn't really change our overall planning.

We are now going to proceed with our next question. And the question comes from the line of Luuk Van Beek from Degroof Petercam.

Two questions. First of all, I suppose that you win the 2 Petrobras FPSOs, which you are the lowest bidder. How -- is it a capacity constraint for all the other things that you have in the pipeline? Or does that match timing-wise with your capacity of 2 complex per year at maximum?

And my second question is about the addition of COSCO for the hull construction. The other 2 yards have gone through the learning curve and I think have become more efficient. Will there be a significant impact of COSCO during the first and maybe some learning to do?

Okay. Thank you, Luuk. So SEAP 2 and 1 capacity. So if we are successful in both, it is within -- of course, within the existing capacity. We just delivered 3 units, and it doesn't mean that we have to be more selective than previously on the prospects that are in the market. So you mentioned our capacity is limited to 2 per year. I don't think that's what we said. I think we said 6 in parallel. So -- and then we have other avenues if there is upside about that, then it could be through partnering or other execution models to be opportunistic while staying disciplined. So for sure, it doesn't limit our pursuit of other prospects in the market.

COSCO and efficiency gains. So the learning on the MPF isn't inherently only in the yard. It's in the overall sequencing and the way we execute the hulls. The engineering lies within SBM's realm. So -- and we have very successful work executed by COSCO, including the integration of the MPF and the topside modules on the Alexandre de Gusmão. So I don't see bringing COSCO has any loss of efficiency more on expansion of capacity.

We are now going to proceed with our next question. And the questions come from the line of Mick Pickup from Barclays.

A couple of questions, if I may. Just on the SEAP project. I think Douglas, you say everything in the pipeline is sale and operate, but the SEAPs appear to be built, operate, transfer projects on a 6.5-year basis. That looks like an old-fashioned lease to me. So why if everything is sale and operator, we're going after those 2, particularly.

On those 2 SEAP projects, I was intrigued to see a new competitor bidding and fairly close list, but you haven't done anything of that complexity. So can you just talk about the competitive landscape if new Indians can turn up? And then I've got a final one on AI afterwards, but we'll start with those 2, please.

All right. Thank you, Mick. So I'll let Douglas talk to the BOT and the lease and operate similarities.

So the term is you build, operate and transfer. But it's basically a sale and operate contract, not be confused with our own BOT that we were using in Guyana. So the way it works is you get milestones from the client through construction. There is 0 debt. And then you have an operating contract, an O&M contract for 6 years. So it really is, if you like, classic sale and operate with maybe a shorter operating period than some of the other projects.

Okay. The press I've been quoted is day rates of like $1.7 million a day, which would look like a typical lease type number?

No, they were separate. We did separate contracts. There's basically an EPC contract and an O&M one.

All right. Competitive landscape. So I think there is -- there was no surprises to us as to who participating there, who we see elsewhere in the competitive landscape. I think we're really happy to see that we came in with the most competitive bid on the SEAP development. I mean you can always say that as we progress and on more larger and complex units that it's good to have some benchmarking on whether we -- how we stand competitive-wise. And the tender was a good testament that we have managed to stay very good in combining technical solid solution with economical solid solution.

So there's always been in the FPSO companies coming and going. So I think we'll see that dynamic continuing as well. And we believe in our value proposition standing out to take the prospects that we pursue or fair market share at least.

And then can I just push on to -- obviously, you made a couple of moves on the digitalization and AI front and I struggle with digitalization and AI intersect. Given that your uptime is 99.5% already, what are the big benefits from this?

Yes, very good. So it's a generally mix. So what we do is talk about life cycle optimization. You got a few levers, right? One is to use data and the scale of data that we have to make sure you have the best availability of your systems, but combined with that at the lowest operating cost, of course. That's the margin generated. Then you have as well the way you manage integrity scopes on larger units and very much of the scope offshore is linked to risk-based modeling. And the better data you have and your improved ability to use data is how you can optimize scope and effectively do the right scope, because as you know, as regulations and systems evolve, there is always layers of conservatism that are in the systems. And by the right use of data, you will be able to peel those away and demonstrate the integrity of all the barriers and efficiency gains to that.

So the journey has been structuring data, then industrializing our ability to leverage those data through the implementation of data platforms that is giving you better access to all your data. And then -- so that is, you can say, is the Cognite element. And then SLB is efficient tools to plug into your data platform in order to effectively make decision-making how to use the data and translate it into reduced scope or better monitoring. So it's about protecting the upside, 99.4%, as you say, is very good. It's about cost levels associated with that, keeping in mind that on the fleet to 17 FPSOs, the running OpEx is quite high. And there is, we believe, significant value creation in lowering that on average over the next 25 years that our fleet is running currently...

We are now going to proceed with our next question. And the questions come from the line of Thijs Berkelder from ABN AMRO ODDO BHF.

Congrats with the strong performance again. First, let's start again with SEAP on simply explaining the timing, maybe that everyone understands it. Am I correct in concluding that SEAP in principle is a sequential project, meaning that you, in principle, would start up SEAP 1 first and then a year later would start up SEAP 2, meaning that production dates are also 1 year after the other?

And secondly, according to my understanding, the only thing which Upstream did on your, let's say, bidding amount is divided by the number of days of 6.5 years, and that explains the concluded day rates according to that magazine. But of course, has nothing to do with your contract. Am I right in those conclusions?

Okay, sorry.

No, let's do it one by one. Okay.

So thank you on the recognition. Yes, we do feel the company continue to perform very strongly operationally. So that is an evolution we want to carry forward. And then when it comes to SEAP, so I think the sequence the way sort of materializing today is probably SEAP 2 and then SEAP 1. These are 2 separate awards that spacing in between is driven by Petrobras. And we can argue if there were to be 2 awards, what will be the optimum of that and in order to leverage synergies, et cetera. At the end of the day, the time schedule on any of these 2 awards and how they connect is really down to Petrobras, but we do feel that there is really good traction in the dialogue we're having with Petrobras in order to find the best development solution to create a win for them and for us.

Sorry, what was the...

It was the Upstream.

The Upstream article. Yes, honestly, I'm not sure I read it. So -- but Douglas, I think you've described very accurately the contract structure. And I think for those subscribing, this should also be available to the official website in terms of how that bid and the various prices for the various types of contracts that incorporates the bid.

Yes. But the timing in principle, this assumes that you have -- if you would reserve one hull for, say, approve first, then another is available for another contract award. That's my conclusion.

We have hosted for all the permutations of awards. So that's not an issue.

Okay. Very good. Then another question. Almirante Tamandaré is producing amazingly, I think now 20% above nameplate capacity or so. Does that bring you an extra one-off bonus? Or does that bring you a structurally higher rate or fee from the client? How should I see that? And in the future, will we see this happening more?

Okay. So we're very happy with the performance of Almirante. And I think we're also seeing the ramp-up of One Guyana happening at similar levels. So maybe you've seen as well, I think it was published yesterday night that the Guyana production reached 900,000 barrels. So we are very pleased with the performance of all our assets and there's still ramp-up margins.

So when you say nameplate, so there's an original nameplate and then we look at optimization as we get the real data points for as we start production. So it's producing at within the nameplate -- adjusted nameplate of today. Commercially, I think there are interesting discussions going around in terms of potential compensation for some of these upsides. So as we are able to materialize that, that will become part of our news publication subsequently. So -- but it is creating a good win, and we're hopeful that maybe we'll have some upside from that as well.

So those discussions are not yet part of your current guidance or is that more for '26?

No. No, they're not.

Okay. Then can we expect further refinancings of Brazilian FPSOs?

Yes. I think it's certainly something that we're looking at and with more a view to optimizing cost of finance rather than accelerating cash because, of course, that's happening naturally with the sale and operate model. So yes, we definitely -- if the market interest rate environment is favorable, we'll be certainly looking to see if we can optimize cost of financing there.

And then maybe just a comment on the previous one. So yes, there are opportunities, but at least the way we understand it is the increase, the way the field operate may not be for a very long period of time. So I'm just trying to manage expectation about the overall impact there.

Good correction or the addition done.

Depletion always is there. Then can you maybe update us on what could be potential timing of the first blue ammonia FPSO? And further, can you update us on what potentially is the plan for your Angolan FPSOs?

Okay. So 2 different questions. So blue ammonia, obviously, we are in the very early stages of looking at the feasibility and after that, the economics of blue ammonia FPSO. Then there is the market side. And I think from that perspective, what we're working through our affiliate in Imodco is really around understanding the evolution of the ammonia market through the terminals business where we have loading terminals also in the past known as [ CALM ] for oil, now we have made that ammonia ready and sort of that's our precursor into the ammonia market, but this is still very early days for that, and there are many things that need to fall into place.

So we are not having a big spend around this. It is about leveraging our capabilities in the decarbonization journey to see both monitoring market evolution and deploying the skills in different configuration that we have to our decarbonization journey and modularization capability in a similar fashion that we've modularized the carbon capture solution and can pick that on a new FPSO.

So it's a longer-term journey. Remind me, was there another point. Yes. Sorry, reflecting as we go, so Angola. So there is a lot of engagement with Exxon around Block 15 and potential expansions of the Kizomba C units for Angola. And we hope Angola has been a cornerstone of SBM's operating fleet for decades, and we're hopeful as well that we've come to a landing on bringing those assets to a longer life.

We are now going to proceed with our next question. And the questions come from the line of Guillaume Delaby from Bernstein.

Two quick questions. First, maybe a more macro one. So you mentioned an acceleration in your business. Maybe could you share with us, I would say, could you provide a little bit of color when have you noticed some kind of change? Was it during the summer? Maybe can you provide us with 1 or 2 details on that?

And the second question, which is essentially a housekeeping question for Douglas. What kind of full year depreciation should we expect? Is $500 million for the full year reasonable? Or would it be higher?

Okay. Thank you, Guillaume. So the acceleration isn't much more than just a validation of the pipeline that we've been talking about over the last period. So we're seeing projects moving from -- in the tender phase and the tenders coming to the market. So active today, Venus, SEAP 2 and 1, there is Búzios 12 also in the market and of course, Exxon are progressing their pipeline. So there's no real shift. It's just we're coming into the critical phase of many of those -- on the journey to FIDs for many of those prospects that we've been monitoring already for quite some time. And we see behind there, there are new prospects coming as well.

So we are on high activity level in our commercial part of our organization. But there's no surprises, and we've been ahead of this -- thinking ahead of this, both specifically in terms of capacity management in-house supply chain and also construction, which is reflected in the actions we've taken that you've already discussed in this call.

And the housekeeping and that, I'll leave that with Douglas.

Guillaume, I'd love to take care of the housekeeping. So I think I would say you're pretty good with your forecast of the $500 million, very reasonable.

We are now going to take our next question. And the questions come from the line of Quirijn Mulder from ING.

Congratulations with the wins of [indiscernible] because I think that's a nice milestone here. Given the focus on gas, does it help you with regard to the focus on long tail for Guyana because that's also gas related? Are you more specializing now in gas for whatever reason? That's my first question.

And the second question is with regard to Thunder Hawk that will end, you have an extension of month. Is there any financial -- material financial consequence if you sell that to the owner? That was my second question.

Very good. So just to be clear, so there's no award on Sergipe. There is the lowest bidder, which allows you -- gives you enter into negotiation with Petrobras. They have their budgets. We have our offering and the need to converge and then they need to get the project sanctioned. So -- but we are enthusiastic about being the lowest bidder, and we are hopeful that we'll be able to unlock the value that will allow them to move to FID. So that is that.

In terms of gas, what we're seeing on several of the more recent units is an increasing gas volume to be handled on our FPSOs. And then in terms of the prospect of long tail, I think the early data points are that, that will continue to increase. And albeit that doesn't introduce really any different technology or capability, it's just an extension of the evolution of what we see as the FPSOs today and tomorrow with increasingly bigger gas volumes. If we were to think about gas market, of course, it's a capability evolution that we'd like to think would lend itself as well into potential more gas type developments in the future.

So it all works well for us in the natural evolution of the company. But it is part of the FPSO offering today to see increasing gas volumes and whether it's $500 million, $800 million or $1.2 billion or whatever we see, these are just natural evolutions of already deploying existing technology just with greater volumes. I'll let Douglas speak to the impact.

So it's the end of the contract. So in a way we have to decommission or give it to the client. It's the latter option that we're going for. And when that happens, we'll be able to release the decommissioning provision. So that would have an impact. And if it happens to end up happening this year, that would then have a kind of, I would say, a bit of a small upside on the guidance. So it's not in the guidance at the moment.

Okay. So -- but let me come back on this story of Petrobras and the [indiscernible]. I understand that you haven't won the award, but yes, it's, let me say, the traditional, let me say, opening the outs and the lowest bidder is going to win. What -- where I'm interested in here in this case is what is the -- how long will it take in your view before you -- let me say, before the contract is signed? And how material might be the discount you're going to give to them in the discussion? And I also understand that maybe Petrobras is looking for 2029, let's say, in order to get it commissioned. So is there any maneuver there for you?

No. I think important to stick this is not an award. There is now a discussion between what we offer and exactly what budgets that they are looking for and how these things converge. The time line of that is not really with us. It's really with Petrobras. We are ready to go with the project. We have a good maturity of the project or projects and based on the tender work that we've been doing. So it's really in the hands of Petrobras, and we have very little play other than trying to work on a solution to be the most competitive possible.

We are now going to proceed with our next question. And the questions come from the line of Jeremy Kincaid from Van Lanschot Kempen.

I have one question. In some of your previous presentations, you have described or illustrated how FPSO prices are rising, they're getting larger and more complex. And I think you talked to the EUR 3 billion number or dollar number as potentially where these FPSO prices could get to. And so then obviously, looking at One Guyana, where it's one of your larger projects. And you're now indicating that the early sale of that could reduce debt by $1.7 billion. I know $1.7 billion is not the sale price, but I was just wondering if you could help me understand the difference between the $3 billion that you sometimes talk to and the $1.7 billion that net debt might reduce after the early sale.

Douglas?

Yes. So I mean, actually, the latest large FPSOs are even going above the $3 billion mark. I would say on One Guyana, yes, there's -- we repaid some of the debt, but most of the debt comes towards the end. Yes. And then there's basically a delta between the formula sales price that we have and the debt, that's going to be our -- the EBITDA that we're able to book. And yes, we'll give you the impacts of -- as and when it happens, we'll give you the impact as we can with the other purchases in the past.

Thank you. We have no further questions. Please continue.

All right. If there's no further questions, we do thank you again for the continued interest in SBM and for joining us this morning, and we'll conclude the call here. Have a great day, everyone.

Ladies and gentlemen, this concludes the SBM Offshore conference call. You may now disconnect your lines, and thank you for your participation.