Key Projects and Technology Deployments in Q2: During Q3, SLB benefited from project awards, especially in its OneSubSea joint venture (with Aker Solutions and Subsea 7). Its key long-cycle international projects include a subsea trees and control award in Mexico, a completion equipment award for providing 35 deepwater wells in Nigeria, a five-year drilling fluids and cementing project in Malaysia, and an EPIC award in Egypt. It signed an MoU with BP for the Subsea Integration Alliance.
In innovative technology, SLB formed an alliance with Eni for a vibroacoustic wave detection system. It introduced a multilayered MWD in an offshore field in the UAE. In Kuwait, its ThruBit (through-the-bit logging system) increased production considerably in the Mauddud carbonate. In offshore Norway, it initiated a gyro-while-drilling service. It also implemented several decarbonization and transition technologies, various data, and AI-enabled automated operations in the US and internationally.
A Balanced Segment Revenue Growth in Q3: SLB saw balanced growth among its segments. Its Digital & Integration segment saw the sharpest quarter-over-quarter revenue rise in Q3 (4% up), while revenues in the rest of the segments increased by 2%. The company’s adjusted EBITDA increased by 6% in Q3 compared to Q2. Geographically, its North American market had a relatively poor performance in Q3 (6% down sequentially) due to softer drilling activity. However, the revenue loss was more than made up by its other key geographic locations. The company’s management continues to place high hopes on the Digital & Integration segment and higher Production Systems sales in Q4.
Impressive Cash Flow Growth While Leverage Declines: SLB’s cash flow from operations increased by 72% in 9M 2023 compared to a year ago. Its FCF more than doubled over this period. Debt-to-equity (0.67x) decreased, too. You may read more about the company in our previous article here.
Thanks for reading the SLB take three, designed to give you three critical takeaways from SLB’s earnings report. Soon, we will present a second update on SLB earnings highlighting its current strategy, news, and notes we extracted from our deeper dive.
