TechnipFMC plc Quarterly Report (Form 10-Q) for the period ended September 30, 2024

Press release · 10/26 05:20
TechnipFMC plc Quarterly Report (Form 10-Q) for the period ended September 30, 2024

TechnipFMC plc Quarterly Report (Form 10-Q) for the period ended September 30, 2024

TechnipFMC plc, a global leader in the energy industry, reported its quarterly financial results for the period ended September 30, 2024. The company’s revenue increased by 12% year-over-year to $2.4 billion, driven by strong performance in its Subsea and Surface Technologies segments. Net income rose to $143 million, or $0.34 per diluted share, compared to $114 million, or $0.27 per diluted share, in the same period last year. The company’s cash flow from operations was $344 million, and its order backlog stood at $12.4 billion. TechnipFMC’s management remains optimistic about the company’s future prospects, citing strong demand for its products and services and a favorable market outlook.

TechnipFMC Delivers Strong Financial Performance in 2024

TechnipFMC, a leading global energy services company, has reported impressive financial results for the first nine months of 2024. The company’s innovative approaches to subsea projects, cost-saving initiatives, and strategic focus on international markets have all contributed to its success.

Revenue Growth Driven by Subsea Segment

TechnipFMC’s revenue increased by $969.5 million, or 16.9%, during the first nine months of 2024 compared to the same period in 2023. This growth was primarily driven by the company’s Subsea segment, which saw a $1,057.7 million, or 22.4%, increase in revenue.

The Subsea segment benefited from a 49.6% higher backlog at the end of 2023 compared to the previous year. This allowed the company to increase revenue from higher installation, integrated engineering, procurement, construction, and installation (iEPCI), supply of flexible pipe, and services activities, particularly in Angola, the United States, Guyana, Australia, Brazil, and the United Kingdom.

In contrast, the Surface Technologies segment saw an $88.2 million, or 8.5%, decrease in revenue. This was primarily due to lower drilling and completion activity in Europe and North America, as well as the sale of the Measurement Solutions business during the first quarter of 2024.

Improved Profitability and Margins

TechnipFMC’s profitability also improved significantly during the period. Gross profit increased by $415.6 million, or 45.2%, to $1,336.1 million. The Subsea segment was the primary driver, with a $403.1 million, or 101.6%, increase in gross profit, due to both higher volume and a favorable activity mix.

The company’s operating profit margins also expanded, with the Subsea segment’s operating profit margin increasing from 8.4% to 12.5%, and the Surface Technologies segment’s operating profit margin increasing from 7.9% to 17.8%.

These improvements in profitability were achieved through a combination of factors, including the company’s focus on cost-saving initiatives, such as its Subsea 2.0® pre-engineered configurable product offering, and the benefits of its integrated commercial model, iEPCI.

Strengthened Financial Position and Capital Allocation

TechnipFMC’s financial position also improved during the period. The company’s net debt position decreased from $115.6 million at the end of 2023 to $129.2 million at the end of September 2024, reflecting strong cash flow generation from operating activities.

The company has also been actively managing its capital allocation, including:

  • Paying quarterly cash dividends of $0.05 per share, representing an annualized dividend of $0.20 per share.
  • Repurchasing $330.1 million of its ordinary shares during the first nine months of 2024, with an additional $1.0 billion share repurchase authorization announced in October 2024.
  • Maintaining a strong liquidity position, with $1,250.0 million in available borrowings under its Revolving Credit Facility as of September 30, 2024.

These actions demonstrate TechnipFMC’s commitment to delivering value to its shareholders while also maintaining a healthy balance sheet and financial flexibility.

Outlook and Growth Opportunities

Looking ahead, TechnipFMC is well-positioned to capitalize on several growth opportunities in the energy industry. The company estimates that over 35 million barrels per day of new oil production will be required by 2040 to meet future energy demand, including approximately 10 million barrels per day of new deepwater production.

In the Subsea segment, the company’s strong order backlog, which reached a record $13.7 billion as of September 30, 2024, provides good visibility into future revenue. The company is also confident in achieving $30 billion in Subsea orders over the three-year period ending 2025.

The Surface Technologies segment is also expected to benefit from growth in the Middle East and international markets, where the company’s unique capabilities and local content offerings provide a competitive advantage.

Additionally, the company believes that the transition to renewable energy resources will take time, and natural gas will play an important role as a bridge fuel during this transition. This is expected to drive growth in the Surface Technologies market, particularly in the Middle East and North America.

Conclusion

TechnipFMC’s strong financial performance in 2024 demonstrates the success of its strategic initiatives and the resilience of its business model. The company’s focus on innovation, cost optimization, and international expansion has allowed it to capitalize on the growing demand for energy services, particularly in the Subsea segment.

Looking ahead, TechnipFMC is well-positioned to continue its growth trajectory, with a robust order backlog, a strengthened financial position, and a clear strategic vision for the future. Investors and industry observers will be closely watching the company’s progress as it navigates the evolving energy landscape.