HOUSTON – TechnipFMC (NYSE:FTI), a global provider of technology solutions for the energy industry, has announced the acquisition of two contracts from Brazilian oil company Petrobras for work on pre-salt fields offshore Brazil. The contracts, which are substantial and significant in size, involve the design, engineering, and manufacture of riser flexible pipes and subsea production systems.
The first contract, valued between $250 million and $500 million, will see TechnipFMC develop riser flexible pipes, along with associated services such as packing and storage. The second contract, won through a competitive tender and worth between $75 million and $250 million, entails the provision of subsea production systems for deployment at the Atapu 2, Sepia 2, and Roncador projects. It also includes installation support and life-of-field services with an option for additional equipment and services.
TechnipFMC's President of Subsea, Jonathan Landes, highlighted the company's leadership in flexible pipe technology and the success of its standardized equipment platform. He emphasized TechnipFMC's nearly 70-year legacy in Brazil and commitment to supporting Petrobras's strategic vision. The company plans to utilize its extensive in-country operations to fulfill these contracts.
All equipment and products for these projects will be manufactured and serviced in Brazil, supporting the development of the nation's pre-salt reserves. The contracts are expected to be included in TechnipFMC's inbound orders for the third quarter of 2024.
TechnipFMC is known for its integrated projects, products, and services across the traditional and new energy industries. With a workforce of approximately 21,000, the company operates in two business segments: Subsea and Surface Technologies. It aims to transform project economics for its clients and support their transitions towards more sustainable energy production.
This announcement is based on a press release statement and contains forward-looking statements involving risks, uncertainties, and assumptions. The company cautions against placing undue reliance on these statements, which are valid only as of their date. For more detailed information regarding the risks associated with these projections, please refer to TechnipFMC's filings with the United States Securities and Exchange Commission.
In other recent news, TechnipFMC has experienced several positive developments. Following a strong second-quarter performance, the company raised future revenue and margin guidance, leading Citi to maintain a Buy rating and increase the price target to $34 from $32. The company's second-quarter success was attributed to its business model transformation, which has positively impacted financial results. TechnipFMC reported a record backlog of $13.9 billion and exceeded its full-year guidance range for its Subsea division with an adjusted EBITDA margin of 17.7%. The company also raised its full-year outlook for Subsea revenue to between $7.6 billion and $7.8 billion, with total company full-year adjusted EBITDA expected to be approximately $1.35 billion.
In addition, Benchmark, an independent firm, upgraded the price target for TechnipFMC from $30.00 to $35.00, maintaining a Buy rating. This followed the company's announcement of increased EBITDA guidance for the years 2024 and 2025, and a reaffirmed commitment to achieving an 18% margin target by 2025. TechnipFMC also received an investment-grade rating from Fitch, providing access to lower-cost debt. These recent developments underscore TechnipFMC's strong financial position and potential for continued growth.
InvestingPro Insights
TechnipFMC (NYSE:FTI) has recently secured significant contracts with Petrobras, and this positive development is mirrored in the company's financial outlook as per InvestingPro data. With a market capitalization of $11.23 billion, TechnipFMC is positioned as a substantial player in the energy technology solutions sector. Analysts are optimistic about the company's future, expecting net income to grow this year, which is a promising sign for investors (InvestingPro Tip #0). Moreover, the company is anticipated to experience sales growth in the current year, aligning with the potential revenue from the newly acquired contracts (InvestingPro Tip #1).
InvestingPro data further reveals a robust revenue growth of 19.08% for the last twelve months as of Q2 2024, indicating a strong performance in the market. The company's P/E ratio stands at 25.25, with an adjusted P/E ratio of 27.42 for the same period, which may reflect investor confidence in its earnings potential. Additionally, TechnipFMC operates with a moderate level of debt, which suggests a balanced approach to leveraging and financial stability (InvestingPro Tip #4).
For investors interested in deeper insights, there are more InvestingPro Tips available, which provide a comprehensive analysis of TechnipFMC's financial health and future prospects. As of now, 9 analysts have revised their earnings estimates upwards for the upcoming period, which could indicate a positive trajectory for the company's financial performance (InvestingPro Tip #2).
To explore further details and obtain additional tips, interested parties can visit InvestingPro for a wealth of information tailored to TechnipFMC's financial metrics and analyst forecasts.
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