On February 22, 2024, TechnipFMC PLC (FTI, Financial) released its 8-K filing, showcasing a strong finish to the year with significant growth in both the fourth quarter and full-year 2023 results. The company, a global leader in oil and gas projects, technologies, systems, and services, reported a 22.6% increase in fourth-quarter revenue year-over-year, reaching $2,077.7 million, and a full-year revenue increase of 16.8% to $7,824.2 million.
TechnipFMC's robust performance is particularly noteworthy given the complex and cyclical nature of the oil and gas industry. The company's substantial increase in backlog, from $9.3 billion to $13.2 billion, suggests a strong pipeline of future projects and a testament to its competitive positioning in the market. The reported free cash flow of $630 million for the quarter underscores the company's operational efficiency and ability to generate shareholder value.
Financial and Operational Highlights
TechnipFMC's income for the fourth quarter stood at $53.0 million, a notable improvement from the loss of $26.7 million in the same quarter of the previous year. Adjusted EBITDA for the quarter was $218.7 million, with an adjusted EBITDA margin of 10.5%, reflecting an 80.9% increase year-over-year. For the full year, adjusted EBITDA rose to $819.6 million, up 26.8% from 2022, demonstrating the company's ability to enhance profitability amidst market challenges.
The company's Subsea segment, which is a significant contributor to its revenue, reported fourth-quarter revenue of $1,720.5 million, with an operating profit of $145.7 million. The Surface Technologies segment also showed positive momentum, with fourth-quarter revenue of $357.2 million and an operating profit of $33.2 million.
TechnipFMC's strong cash flow performance is further highlighted by its operational cash flow of $701.1 million for the quarter. The company's disciplined capital management is evident in its reduced net debt position, which declined by $534.3 million to $115.6 million, providing it with a solid financial foundation to pursue growth opportunities.
Strategic Outlook and Management Commentary
Doug Pferdehirt, Chair and CEO of TechnipFMC, expressed pride in the company's strong quarterly and full-year results, attributing the success to growth and operational momentum. Pferdehirt emphasized the record level of iEPCIâ„¢ awards and the quality of inbound orders, which exceeded 70% of Subsea orders. He also highlighted the company's robust order intake, which drove a 50% increase in Subsea backlog and is expected to support significant growth in Subsea adjusted EBITDA in 2024.
"We have entered an unprecedented time for the development of conventional energy resources, particularly offshore. This backdrop, combined with our unique capabilities, gives us the confidence to increase our expectations for Subsea inbound to reach $30 billion over the three-year period ending 2025. The significant increase in our order outlook will provide additional growth in backlog and further extend the execution of our project portfolio through the end of the decade."
Pferdehirt also noted the award of the Mero 3 HISEP® project by Petrobras, a milestone for the subsea industry, and a testament to TechnipFMC's technological innovation and project integration capabilities. Looking ahead, he anticipates continued strength in the market, driven by the demand for energy and the evolution of market trends, including a shift in capital flows, the role of new technologies, and the expanded role for subsea services.
Conclusion
TechnipFMC's earnings report reflects a company that is not only navigating the complexities of the energy sector but also capitalizing on opportunities to drive growth and shareholder value. With a solid increase in backlog and strong free cash flow generation, TechnipFMC is well-positioned to continue its trajectory of growth and profitability in the years ahead. Investors and stakeholders can look forward to the company's sustained operational excellence and strategic initiatives that align with the evolving energy landscape.
For more detailed information on TechnipFMC's financial performance and future outlook, investors are encouraged to review the full 8-K filing.
Explore the complete 8-K earnings release (here) from TechnipFMC PLC for further details.
