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The good news comes from the reassuring guidance after the difficult Q1. Subsea is higher than our estimates (and consensus). Overall, EBITDA for FY20 has been revised by $350-400m above Q4 19 guidance to c. $1.1bn, and above our estimates ($940m).
Companies: TechnipFMC plc
AlphaValue
TechnipFMC’s adjusted guidance deviates from the conventional format, but it is nonetheless more helpful than Saipem’s (which simply did not provide one). While management commented that there were no project cancellations for the moment, the deferrals will impact the company’s margins. As in the last crisis, services companies bear the cost of oil majors pulling the brakes on investment. This justifies TechnipFMC’s cautious stance and dividend cut.
2019 has been filled with many commercial successes as proven by a book-to-bill at 1.69x. Yet, this has not stopped the stock price from sliding, as the company struggles with lower margins and lower oil prices. However, we note that operating cash flows are guided upwards against a lower EBITDA, increasing de facto the cash conversion from EBITDA, another issue TechnipFMC has been dealing with.
Without any big award to present this time (Q2: Arctic 2 LNG / Q4: Rovuma LNG), the release was left with negative surprises. More precisely, it seems that the market was spooked by the declining EBITDA margin in the subsea division (10.6% vs 12.3% in Q2). While this outcome was unexpected, the correction looks rather severe, considering that the increased guidance provided last quarter has been repeated.
The timeline of events might look a tad chaotic (merger / resignation of former Technip’s CEO / spin-off) but, as such, we do not see this transaction as negative. Both divisions operate mainly on a stand-alone basis and might appeal to a different set of investors. Timing-wise, it seems that the completion of Yamal LNG (and Arctic 2 LNG being at the very early stage) had quite some weight on the decision to start the spin-off now.
Revenues are below consensus (-8%) but the market should nonetheless focus on TechnipFMC’s strong inbound orders (the book-to-bill ratio is above 2). The group recorded $6.2bn of new orders while we had tracked c.$3.5bn. Guidance has been revised upwards for the onshore/offshore division and downwards for the surface technologies division (net revision is slightly positive).
Q4 revenue was $3.7bn (-16% yoy). The adjusted EBITDA came in at $573m (+9% yoy), resulting in an adjusted EBITDA margin of around 15.6%, which is 435bp above consensus. The company reported a net loss of $154m (-$0.33 per share), which was mainly impacted by a non-cash charge resulting from the tax reform. The order intake came in at $3bn (vs. $2.5bn in Q3), mainly boosted by several significant awards in the Subsea division at the end of December. Management has confirmed 2018 guidance and
TechnipFMC held its first analysts day since the merger. The initial run rate cost synergy target ($400m) has already been met halfway and management has raised the target to $450m by the end of 2019. Management is aiming for a 300bp reduction in the effective tax rate, which should start in 2018 with the full benefit in 2019 and beyond. As expected, capital expenditure should slightly increase compared with the guidance for 2017 (approximately $250m).
Q2 revenues reached $3.8bn, in line with consensus, and net income came in at $165m (vs. $55m in Q2 16). The adjusted EBITDA improved to $501m (+44% yoy). The backlog stood at $15.2bn, on the back of $3.2bn new orders (o/w Subsea $1.8bn, Onshore/Offshore $1.1bn, Surface Tech $0.3bn). 2017 guidance: - Subsea: revenue at least $6.1bn, EBITDA margin at least 17%; - Onshore/Offshore: revenue at least $7.3bn, EBITDA at least 8% (increased vs. 6.5% in 2016); - Surface Technologies: at least $1.4b
Research Tree provides access to ongoing research coverage, media content and regulatory news on TechnipFMC plc. We currently have 0 research reports from 3 professional analysts.
NextSource is uniquely positioned to build a leading vertically integrated position, ex China, in the supply of Lithium-ion battery anode material which is essential for the Energy Transition. The company is commissioning phase 1 of its world-class Molo graphite mine in Madagascar and is in the final permitting process for its first Battery Anode Facility (BAF) to be located in Mauritius. The company is backed by Vision Blue, established by Sir Mick Davis, former CEO of Xstrata. On our calculat
Companies: NextSource Materials Inc
Capital Access Group
i3 Energy announced that its 2024 guidance consists of expectations to drill 10.5 net wells (7.6 net wells in Central Alberta, 1.9 net wells in Simonette and 1.0 net wells in the Clearwater play) with 85% of capex allocated to the second half of the year. Total capex expenditure for the year is guided at $US 50.9m. The company indicated that it intends to commence pad drilling of its Montney acreage in Q1 2025 and we perceive the company is bulking up for that significant growth opportunity for
Companies: i3 Energy Plc
WHIreland
Beowulf is advancing a portfolio of projects in Europe focussed on metals and minerals that are critical to enabling the continent’s transition to a greener economy. Awareness of Europe’s over-reliance on external supply sources for such vital raw materials is driving growing political support for ‘home-grown’ projects. Beowulf is strategically positioned to leverage this fast-evolving trend – its Kallak project in Sweden holds potential to deliver high-quality iron ore to lower the carbon-inten
Companies: Beowulf Mining PLC
Alternative Resource Capital
Falcon has raised gross proceeds of US$8.9m via a placing and subscription at a price of 6p/share and the granting of overriding royalty interests. The net proceeds, together with Falcon’s existing cash resources (cUS$4.3m) will be used to fund Falcon’s net share of 2024 capex (cUS$9m) associated with the 40MMscf/d Shenandoah South Pilot Project, including the drilling, stimulation, and flow testing of two 10,000ft horizontal wells. The funds will also enable Falcon to fund its share of the cost
Companies: Falcon Oil & Gas Ltd.
Cavendish
Beowulf is an AIM/Spotlight-listed developer of two flagship assets; Kallak, a high-grade iron ore project in Sweden and the Grafintec Graphite Anode Materials Plant. The Company's Kallak North project has the potential to produce 2.5mtpa of high-grade, premium iron ore concentrate suitable for the growing green steel industry in Sweden. Additionally, Grafintec's Anode Material Plant Project is well positioned to serve the growing EV battery supply chain in Europe, whilst supporting EU plans
SP Angel
I3 has released its work programme and budget for 2024, alongside providing guidance for the year. This represents a larger programme than 2023, with the focus now shifting to greater operational activity and production gains given the additional balance sheet strength achieved in recent months.
Zeus Capital
Companies: FOG PHC FEN BBSN ELIX
Companies: 88E CNC FTC TRCS HEIQ CREO ZAM
Despite end market demand remaining difficult in several regions Trifast has announced that revenue and profitability will be marginally ahead of the guidance provided at the end of January. Self-help initiatives instigated during 2023 are starting to come through providing visibility on the majority of the £3.0m savings identified to come through in the current financial year (Mar FY25). Zeus estimates were in line with guidance of £230m revenue, £11.5m EBIT and £6.0m PBT. We leave forecasts un
Companies: Trifast plc
Companies: MPE TRI VNET BVXP HVO
• Multiple tests over multiple zones in multiple horizons were run at the Mopane-1X exploration well. The flows achieved during the well test reached the maximum allowed limits of 14 mboe/d. The flow rate was constrained by the size of the available surface facilities. • The AVO-1 horizon encountered at Mopane-1X and Mopane-2X are in the same pressure regime, suggesting that the entire area (8 km diameter) between the two wells is connected. Overall, in the Mopane complex alone, and before dril
Companies: SINTANA ENERGY
Auctus Advisors
Companies: Touchstone Exploration Inc
Shore Capital
Jubilee today reports its Q3 and third quarter operational results from its expanding operations in Zambia (copper) and South Africa (chrome and PGM). South Africa is on a growth trajectory with record chrome production of 409kt in the quarter (Q2 FY2024 381kt) and a monthly record in March of 145kt and production YTD of 1.13Mt (0.94Mt). Jubilee is well underway to its annual target capacity of 2,1Mt/yr especially with the new 300kt/yr chrome plant at Thutse expected to be operational in August
Companies: Jubilee Metals Group PLC
Companies: Ferrexpo plc
Liberum
Companies: AURA OMI AAL KAV POW BMN EST SVML
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