SBM OFFSHORE 2016 YEAR END UPDATE

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Algemeen advies 07/12/2016 18:17
December 7, 2016 As the Company nears its year end, and ahead of the scheduled FY2016 earnings announcement, the Management Board announces the following non-cash adjustments to its accounts, which are the result of its regular year-end review taking into account uncertainties in outlook for certain areas of its operations reflected in its updated business planning assumptions1:
Summary
Impairment of net investment in construction yard Paenal in Angola of approximately US$60 million
Recognition of DSCV SBM Installer long term charter as onerous contract at a cost of approximately US$30 million
Investment in JV holding Construction Yard Paenal

The activity outlook for SBM Offshore's investment (30% ownership) in the Joint Venture owning the Paenal construction yard operating in Angola has deteriorated. As a result, the Company's carrying amount for the net investment in this entity is to be impaired by approximately US$60 million. Because this investment is consolidated using the equity method, this non-cash impairment is recognized in the Company's Consolidated Income Statement on the line item share of profit of equity-accounted investees.


DSCV SBM Installer Charter Contract
SBM Offshore has a long-term charter contract with the Diving Support and Construction Vessel (DSCV) SBM Installer. Due to the ongoing industry downturn, which has created significant over-supply in offshore markets, the vessel's projected utilisation has decreased. As a result, the contract is classified as onerous and a non-cash provision of approximately US$30 million is to be recognized in the Gross Margin of the Turnkey segment. SBM Offshore's investment (25% ownership) in the Joint Venture which owns the vessel is consolidated using equity accounting.

Outlook and Guidance
The Company confirms its FY2016 Directional2 revenue guidance of at least US$2.0 billion. Including the above charter contract provision of approximately US$30 million Directional2 FY2016 EBITDA guidance is around US$720 mln, compared to the previous guidance of around US$750 million. However on an underlying basis, adjusting for the aforementioned provision and the increase in compliance related settlement provision of US$22 million reported in the 2016 Half Year Earnings, underlying Directional2 FY2016 EBITDA guidance is around US$ 770 million.

Financial Calendar
Date Year

Full-Year 2016 Earnings - Press Release
February 8
2017

Annual General Meeting of Shareholders
April 13
2017

Trading Update 1Q 2017 - Press Release
May 10
2017

Half-Year 2017 Earnings - Press Release
August 8
2017

Trading Update 3Q 2017 - Press Release
November 7
2017

d.d. 8 dec. 2016
SBM EUR 13,785 -13ct vol. 76.000







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