Key subsea projects in Q1: In Q1 2023, TechniFMC’s (FTI) total inbound order amounted to ~$2.9 billion, which included large, iEPCI (integrated engineering, procurement, construction, and installation) projects in Subsea. Increased levels of integrated FEED projects led to higher iEPCI contracts. Norway saw significant projects in Q1, including Aker BP Utsira High iEPCI™ Development, Equinor Irpa Development, and Equinor Verdande Project. Among these, the Aker BP contract would amount to $500 million-$1 billion.
FTI pins its hopes on iEPCI and Subsea 2.0: The company’s Subsea segment saw a 3.4% quarter-over-quarter revenue rise in Q1 versus a 6.3% fall in revenues in the Surface Technologies segment. Increased project activity in Brazil and the Gulf of Mexico resulted in a revenue rise in Subsea. Operating income, too, improved in this segment in Q1.
On the other hand, lower international activity and timing of backlog conversion reduced sales in the Surface Technologies segment. This led to a significant operating decline in the segment. The company’s management believed that the growth from iEPCI, Subsea 2.0, and the vessel ecosystem would reduce project complexity and risk and improve its results in the future.
Negative cash flows: FTI’s cash flow from operations remained in the negative territory and deteriorated further in Q1 2023 compared to a year ago. Naturally, its FCF was negative and fell more steeply year-over-year. Debt-to-equity (0.43x) did not change much from a quarter ago. You may read more about the company in our previous article here.
Thanks for reading the FTI take three, designed to give you three critical takeaways from FTI’s earnings report. Soon we will present a second update on FTI earnings highlighting its current strategy, news, and notes we extracted from our deeper dive.
