SBM Offshore N.V. (SBMO) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for holding, and welcome to the SBM Offshore Q1 2021 Trading Update. [Operator Instructions] I would like to hand over the conference to Mr. Ludovic Robino. Go ahead, sir.

Thank you, operator. Thank you all for joining us today. This call is being recorded and will be available for replay on the company's website. Today's prepared remarks will be delivered by Mr. Bruno Chabas, followed by a Q&A session. Before we begin, I would like to point out the disclaimer at the bottom of our press release and remind participants that some of our comments today may include forward-looking statements, reflecting SBM Offshore’s view of future events. These matters involve risks and uncertainties that could cause our results to materially differ from our forward-looking statements. The risks are included in detail in SBM Offshore’s 2020 Annual Report, which can be found on the company's website. Once again, we will welcome your questions after the conclusion of the prepared remarks. I will now turn the call over to Bruno.

Thank you, Ludovic, and good morning to all. Thank you for taking the time to join the SBM Offshore’s First Quarter 2021 Trading Update Call. My name is Bruno Chabas, CEO of SBM Offshore, and all members of our management board are joining me today. Before summarizing the company's performance, I would like to highlight again the fantastic work done by SBM-ers throughout the world, while dealing with various restrictions and extended time spent away from family since the pandemic started more than a year ago. Our teams are doing a great job in delivering on operating performance and on project delivery. SBM Offshore continues to prioritize the health and safety of its personnel and minimize impact on operations while we steer through the COVID crisis. Now turning to the first quarter 2021. SBM Offshore delivered good results in line with expectations. We reiterate our 2021 guidance. Major projects are on track and operation performance is strong. We received the LOI for the FPSO project, Almirante Tamandaré, which extends SBM Offshore's cash flow visibility to 2050. Our contractual backlog continues to grow and underpins the investment case of SBM Offshore. It will enable a gradual and successful transition from our core business, which is still growing today towards renewable, which is projected witnessed strong growth in the medium-term future. Our Lease and Operate division continues to manage the COVID situation with very good results. Be it onshore or offshore, our teams maintained the discipline on existing protocols and procedures. The first quarter fleet uptime came just below 99%. The Turnkey division is going through a significant growth phase with the present 4 FPSO projects under construction, which are all on track. In addition, we are building Fast4Ward hull in anticipation of further growth. On FPSO Liza Unity, the modules integration and commissioning is progressing, with first oil targeted for next year. FPSO Sepetiba, Fast4Ward hull, was launched out of drydock, and the Module fabrication continue to progress in Brazil and China. The construction of FSO Prosperity topsides started in the yard in Singapore. And following the signature of the FPSO Almirante Tamandaré in February this year, this project started with key mobilization, engineering and work on long lead items, whereby the Fast4Ward hull construction is progressing. Then I would like to highlight our year-to-date safety performance. The total recordable injury frequency rate stand at 0.13, which favorably compare with our 2021 target. As always, SBM Offshore continued to prioritize and to generate safety -- awareness around safety. Over to the financial. The company generated a total underlying directional revenue of $536 million during the first quarter. This is a decrease of 12% compared to the same period last year, mostly due to the Turnkey segment. The 4 FPSOs under construction, although representing a high level of turnkey activity, will mainly contribute to revenues once projects are delivered. The net debt position at the end of March was $4.3 billion compared to $4.1 billion at the end of 2020. This expected increase is a logical consequence of the ongoing investment in the 4 FPSOs under construction. Our market outlook remains positive. The project that SBM Offshore delivers continue to attract funding as they concentrate on high-quality, deepwater development. These projects are both carbon and cost-efficient and benefit from the large-scale production, which is where our Fast4Ward concept demonstrates its value to our clients. Work continues on our emissionZERO process, which will support our client emission reduction commitment. SBM Offshore continue to position itself as a technology leader in the energy transition and is pleased with the progress made on the Floating Offshore Wind project and the Wave Energy Convertor prototype. Our new energy business is making good progress in positioning the company in this growing market through technology development bringing innovative and cost-efficient solution. We conclude with our 2021 full year guidance. We maintain our 2021 directional underlying EBITDA guidance to around $900 million. Underlying directional revenue guidance is maintained at around $2.6 billion. As stated before, this guidance includes directional revenue and EBITDA of $75 million related to the cash received in 2021 from the Deep Panuke contract. This revenue and EBITDA were excluded from the 2020 outlook and underlying results. The guidance consider the currently foreseen COVID-19 impact on project and fleet operations. The company highlights that the direct and indirect effect on the pandemic could have material impact on the company's business and results. So to summarize, SBM Offshore delivered again a strong performance and maintained its 2021 full year guidance. We deliver value to our shareholders with the dividend payout, representing more than 5% yield. We demonstrated commercial success with the award of the major project, Almirante Tamandaré, and SBM Offshore positions itself to capture future awards with 2 -- Fast4Ward hull, supporting our tendering activity. On top of this, we are making good progress in our journey in providing solution for the energy transition. So this concludes the prepared remarks portion of the call today. So thank you for listening. Operator, we can now open the call for questions.

[Operator Instructions] And the first question is from Mr. Luuk Van Beek, Degroof Petercam.

You're on mute. We cannot hear you.

Yes. Can you hear me now?

Yes, we can.

Yes, sorry. I got some technical difficulties. But actually, 2 questions. One is on your revenue guidance for Lease and Operate, which is $1.6 billion in Q1, then it requires a run rate of around $400 million, so roughly 10% above Q1. Can you talk about what would drive an acceleration later this year? What [indiscernible] quarterly phasing of revenues in these? And the second is on the Liza Destiny. If you can give some more background to the problems with the gas there? And to what extent this could also affect other Fast4Ward designs in the future? If it's really an issue that's only relevant for this unit or that it can affect as the general design?

Okay. So thank you very much, Luuk. And so what I propose is that Douglas is going to answer the -- or guide you through the revenue guidance. And then Philippe is going to provide you more light on what's happening on Destiny. So Douglas?

Yes, Luuk. So yes, specifically on the Lease and Operate, revenue guidance of $1.6 billion. Yes, indeed, it's not linear and the main driver of that is timing of bonus payments. So that's basically the difference.

Okay. So thank you. Philippe, you want to take the second question?

Certainly. So Luuk, the gas compression system on Destiny is composed of a number of elements. 2 main gas compressor, 1 injection gas compressor and a flash gas compressor. The first 3 are working well, and they have been able to reinject 88% of the gas. So I think that's important to flag. We have some issues on the flash gas compressor, specifically on the third stage is being fixed, and we believe that we should be able to restart sometime in July. In case it doesn't happen, we have built a backup plan for a new design and an improved design. It's a decision we took in 2020 that should be delivered by the end of the year. To your question on the other units. First, we’re working very hard on this, which means typically doing more commissioning before leaving Singapore. And on the technology itself, it's a different technology on the upcoming units, and they are as well [ redundancy ] being built. So we believe that the risk is limited to Destiny.

The next question is from Mr. Quirijn Mulder, ING.

I have 2 questions on Brazil, 2 questions on Guyana, if you allow me. Can you maybe give us some idea about Mero 4, because it looks like that at the end of February, you were the sole bidder. So we have 5 months -- 2 months later. So maybe you can give me some idea about it? And maybe on the situation with regard to [ Kuito ], I understand that [ Kuito ] is going to get in your contract for Búzios 7 and it is also your supplier and one of your most important supplier. So can you maybe give me some idea about the -- does it affect your relationship with these guys? Or is there anything you can tell me about it? And the other question for later on.

You don't want to give us the overall picture. So like this, we might be able to answer everything in one shot.

Yes, yes, that's fine. That's fine. The other is about Guyana. So full work on [indiscernible]. I understand that at the fourth quarter, there will be a re-hull of this Liza Destiny, and they are also aiming to raise capacity. So do you have any idea about how much that will be? And I also understand that you have -- that you're switching with the gas compression also for the new units from [indiscernible], I think, a [indiscernible] Energy Solutions towards General Electric. So maybe you can tell me something about that? And then there are some stories. I mentioned that you are looking for, let me say, that -- actually is looking for even a larger FPSO for Yellowtail. Does that stick into your program? I think, at 250? And do you not think that you're -- that they are moving into a new competitive arena with the Koreans also having possibilities to step into that market? Those are my questions.

Yes. No, okay, fine. And that was good to have the full set of questions because it, by and large, they're associated to the -- how the market and what is happening on the market. And I think it's a worthwhile opportunity for us to restate that we're going to be -- remain extremely focused on where we can add value to all the stakeholders and all the stakeholders start with our clients. Now the main focus that we have through our Fast4Ward program has been to, first of all, to increase the envelope of the FPSO we can produce. And the unit that we have, you can see this through the Almirante Tamandaré, like the Unity or like Prosperity. Though the FPSO are large in nature, they can accommodate quite a significant upside. And that's the focus we have. Today, we have 4 projects under construction. We have 2 hulls under fabrication. There are opportunities in the market. We're not going to run after all and every opportunity. We're going to be extremely selective, and we're going to be selective to the tune where there is a communication in between ourself and the different stakeholders, including clients and local authority, which understand the value that we bring. So this, in part, answers your question on Mero 4. Mero 4, we said we did an offer. It's a public information. We submitted an offer on this because we believe that the solution that we can bring on Mero 4 would be a solution, which would bring value to our clients and to everybody else. Now the client is in charge of the tendering process. They go under the -- with them. I cannot comment anymore on the subject. With regard to the overall market and the point that you made on the supply and the fabrication is well made. What we see today is that there is basically an increase in demand in different segments of the oil and gas market, and the FPSO is one of them, which leads to basically some yards being either at capacity or being close to capacity. In our plan, looking at the type of projects we can take, we are only looking at this and to make sure that we can secure the capacity to deliver the project that we can deliver. In line with the commitment we're making to the clients and in line with the track record we have had over the past 17 FPSO that we delivered, which on average, we have the best track record of the industry, and we want to maintain it. Now I propose that we don't go through the details on Liza Unity change in production profile and so on. This is really something, which is put out to the client. If the clients want to comment on the subject, that's for them. That's not for us.

Your question is from Mr. Andre Mulder, Kepler.

Maybe a -- yes, this is a follow-up on Quirijn's question. You are -- in principle, you're indifferent between Turnkey and Lease. But the last number of projects have been really in the Lease side. To what extent do you still feel that you're competitive from the Turnkey side? So what kind of difference is there between the Lease and the Turnkey side? Of course, the rational difference is, of course, the Lease part. But is there any difference in, let's say, the pricing of those things that make you look more for Lease projects and for Turnkey projects?

No. So first of all, we always have said that we are agnostic to either Lease and Operate, BOT or Turnkey project. But we are agnostic under one condition, that the Turnkey projects are basically based on the design that we understand, and that makes sense. What you see when you look at the statistics of delivering FPSO, is that, on average, Turnkey projects are being delivered much later than Lease and Operate contract. And there is a clear reason for that. There are so many interfaces within a Turnkey project between the client, the engineering contractors, the fabrication, and all of these, and nothing is integrated, which creates a lot of negative interface. And basically, you see it in a statistic of what has happened over the past 10 or 15 years in delivering FPSO. So our premise on the Turnkey side is always to work under the know-how and the system that SBM Offshore has delivered. Then we are truly agnostic on this. At the end of the day, what we want to do is to deliver a good value to our stakeholders, and we start with our clients on this. And if they decide to go only then Operate or BOT, because that's really where you see the value, and you deliver an asset, then you operate it for a period of few months, few years, while you're really doing the value. Then whatever the clients want, we go with it. The nature of the market so far has been mainly the Lease and Operate. That's what it is. And we take it as it comes.

The next question is from Mr. Edward Donahue, One Invest.

A few from my side. Just on the comment with regard to the COVID costs. Excuse my short-term memory, but what would the COVID costs for full year '20 and the sort of quarterly run rate that you're seeing in Q1? Just to sort of -- I know it's difficult to quantify going forward, but just to give us an idea of what were sort of framework, at least? That would be one question. Okay. Sorry, I guess [indiscernible] there's going to be a list, sorry. Then just on the yard capacity comment you were making. Are you actually talking options on yard capacity to sort of lock in slots as and when required, especially with regard to the -- and have you actually started to cut steel on the 2 hulls that are outstanding? And then just going back on your comment with regard to directional revenues on the Lease and Operate side? And that was his comments with regard to the bonus component. If you look at Liza -- I'm sorry, at Liza Destiny, is Liza Destiny an integral part of our bonus payment? And how would the bonus payments stand with regard to some of the friction with regard to the performance of the entity so far? And have there actually been any costs taken so far through '20 and expected through '21 on this project? I'll stop there actually.

Okay. So for the 2 questions on COVID cost and directional revenue, Douglas is going to go more in detail there. Obviously, the COVID cost is something which has a significant impact, but this, at times, could be a bit fuzzy to quantify. But nevertheless, we can't provide you an answer. With regards to the yard, yes, we're making commitments. We're making engagement. At the end of the day, it's like everything else, the relationship is extremely essential with working, and is essential if we want to deliver. So there is some commitment, which are hard or sought with a number of key players in the industry in order to ensure that we will deliver on time and on budget and to the satisfaction and everybody. And that includes not only the supplier, but also the yard. Now obviously, I cannot go more into the detail on that. But that's part and parcel of all ways of doing business. And the commitment that we're making to our clients when we say we're going to deliver something at a certain date. With regard to the 2 hulls, which have been committed and not under contract at this stage, yes, we have started the engineering and progressing on steel fabrication at different stage for each well, but it is progressing according to our plan. On the financial side, Douglas?

Yes. So on the COVID costs, we're not giving a breakdown of those, as we said last year. So we did have impact from an EBITDA perspective, particularly in operations. Some of the costs are reimbursable, others are for ourselves. Based on the experience that we've built up last year, we've incorporated it in our guidance. And the way that it's unfolding is very much in line with expectations. And you had a question on the revenue and bonus payments. I would say Destiny doesn't really have any major effects relative to the overall guidance.

Okay. So it's immaterial on the bonus component. Has it actually had and if you look at what's required for this year, you’ve noticed whether you might disclose that, I don't know, a noticeable impact on costs?

No.

Your next question is from Mr. Thijs Berkelder, ABN AMRO.

Let's say, 4 questions. First, I would see COVID cases going up sharply in India. And as a result, new lockdowns. Singapore announced as well. Maybe give an update on what this practice means for SBM Offshore? Secondly, we now already see 3 new potential or big Fast4Ward towards Mero 4, Búzios mining, Yellowtail. Why have only 2 Fast4Ward, let's say, prepared and not already 3 or maybe 4? Third question is on zero emission (sic) [ emissionZERO ] FPSO concept development. Can you give some grip on what kind of emission reduction we can expect from, let's say, a Prosperity FPSO versus, let's say, the Destiny FPSO and maybe versus, let's say, one of your last generation Brazilian FPSOs? And then fourth is on your LNG to wire vessel concept. And we've seen making quite some price brands LNG to power vessels being awarded to the market leader in South Africa, with quite a lot of [indiscernible] what's being paid there. And the same situation now ongoing on an existing vessel offshore or inshore [indiscernible]. Is there any update on LNG to why are you closing in now on a serious context and [indiscernible] having serious concern for [indiscernible] their vessels?

Okay. So quite complete set of questions. So looking at the COVID and the evolution of the COVID-19 cases in India, and the impact it could have in Singapore elsewhere. Today, we cannot quantify this, and we cannot have a visibility. In fact, it's what I gave in the current guidance when I see that the guidance at this stage, currently 14 -- the COVID-19 impact on project and operation. If the situation was to change drastically or dramatically, obviously, we will have to assess the situation and take it as it come. With regard to the market and why on earth are we not printing more Fast4Ward well and having 4 or 5 under construction. I would say, the more the merrier. However, again, our point is we are going to remain disciplined. And being disciplined, what does it mean? It means that we're going to select a limited number of projects with a number of key clients, whereby we can provide value to them and deliver on time, on budget and after [ the ] commitments. It is absolutely essential if they want to make the economics and if we want the economics of those projects to be sustainable for the long period of time. So we're not going to go overboard. We have a plan. We are executing this plan in line with our commitment, along with a number of discussions with different parties in the market. But the idea is to be disciplined and reliable on the way we're going to deliver. With regard to the CO2 emission. So just a few numbers to put things in context. If you look at our fleet, in 2020, our fleet, excluding Liza Destiny, has a footprint of 15 kilograms of CO2 produced per barrel of oil. If you look at the new vessel, that will be put in production. Given the size of the vessel, given some of the equipment that we are putting on board, given some of the review we're doing along with our clients, the footprint of the vessel, when they start production, is going to be in the range of 7 to 9 kilograms of CO2 per barrel of oil produced. So quite a significant improvement, as you say, on top of what we can do linked to digitalization, to improve operation and what we have demonstrated that we're doing over the years. The idea is through the emissionZERO basically to be able to come by -- in the coming few years with an offer in the market, which is going to include additional components, whereby we could have a carbon, basically zero CO2 being emitted from the unit in production. But we're progressing every unit that we're making or progressing will go into the next step. With regard to LNG to wire. You're correct, there are a number of activity happening there. We have submitted a number of offers, which really help us calibrate our offer to understand where we are. Our understanding at this stage is that the technical offer that we're doing is actually in part with the market requirement. But there are some elements, which are pretty important when you do an LNG to wire type of project, which is linked to the value chain and in particular, the LNG supply for the project. And it's usually an overall concept when you do a tender. There we have a number of things to learn, and we're in the process of learning them. My expectation is really by half year, so when we do the half year results in August, we're going to be able to provide you more light on the new energy-based business at large, including LNG to wire, the strategy, how we are positioning and the progress we have made there.

[Operator Instructions] And there's another question from Mr. Edward Donahue.

Just with regard to the comment you made earlier, Bruno, with regard to the returns for all stakeholders, but also the selectivity that you're looking at on projects. Bearing in mind some of the shifting within the sector of other competitors and the ability to compete or not. And I know that you've always had a focus on the equitable return to you as a provider versus the risk taken and the size of projects and the complexity, et cetera. Do you actually feel that there is a potential change in dialogue with regard to customers? Or is it business as usual? And therefore, it is what it is? That's one thought and -- I'd be interested in. And the other one is just looking at the oil price where we are now, and looking at a 5-year average, we're roughly $52, $53 in the last 6 months. We've been north of $60. Are you seeing any projects sort of being reassessed, being rescoped that are coming back that were on the sort of on hold and/or new projects that are actually being looked at? Are you sort of, let's say, brownfield that are almost restarted, never got off the ground and actually sort of fresh greenfield?

Yes. So yes, the behavior on the market at this stage is such -- so trying to answer your question that there is both, a significant increase in demand for FPSO -- the new FPSO to be built. And that's mainly linked not to the reassessment of the economics, but that's linked to opportunities of field with a breakeven price of anywhere between $25 to, I would say, up to $40 per barrel. And there are a large portfolio of those projects and maybe the oil companies, by and large, want to produce -- put in production this project as soon as possible. So there is an acceleration there. It's not a reassessment of the field as far as I can see, linked on the economics. It's more the recognition that the economic value of this field is good and that they want to put them in production as soon as possible. The net effect of this is that there is a significant increase in demand for FPSO. And in my view, there is definitely not enough competent capacity in the market to deliver everything which needs to be done there. And the history of the FPSO market that we have seen for the past, basically, 30 years, is going to repeat itself with a number of FPSO, which is going to be late in delivery or significantly and a number of significant issues, which are going to happen. Now we -- at SBM Offshore, we have demonstrated for the past 20 years, our ability to deliver FPSO. And again, we all view the statistic is not that long ago about our capacity to deliver FPSO compared to the rest of the market. On the last 17 FPSO we have delivered compared to the rest of the market, we are far ahead of anybody else, and we want to maintain this track record. Why do you want to maintain this track record? Because at the end of the day, that's where we can generate value to our clients and significant value to our clients and also value to ourself and to our shareholders. And that's where we are. But we're definitely seeing a shift in the level of demand in the market. And again, I don't know if it's overconfidence or if it's loss of knowledge of the industry, but the belief that this market is a commodity product, and which is going to lead to a number of issues in the industry.

Okay. And if I just take those comments and then scroll it back to the 2 hulls that you've got. Would you anticipate this year actually having both of those hulls committed to projects? And/or would you anticipate even adding a third hull? I'm recognizing your earlier answer. Looking at the flow of business that could be coming by the end of this year? And then just on your own engineering capacity. Do you -- bearing in mind, you're very cognizant of risk. But do you see an ability to flex that capacity to push harder or hiring further on your engineering capacity?

So I would say, maybe to look at this question differently. If you look at the bottleneck, for us, in producing FPSO, the bottleneck is definitely not coming from the steel, even though more and more, you can see that there are constraints in the fabrication side and on some long lead items. The main bottleneck is really on the capacity of product management and engineering capacity. Now always of addressing this is really threefold. The first one is the program we started in 2014, and which is still undergoing Fast4Ward, where basically through standardization, you can look at the increase of productivity of our engineering workforce. And to make sure that the rare resources are being allocated to things, which are novel in the project, and therefore, giving us the ability to deliver. We also have increased and still increasing our engineering capacity, mainly in India, and that's what we have done over the past few years, and we keep doing that. And we're looking at times, if there is some partner with whom we can work and which are compatible with our ways of working, both in terms of capacity, knowledge and fit at different levels. So we're looking along those 3 lines. We are not going to go overboard in increasing capacity. I mean the -- there is enough talk in the market about are we coming to peak oil tomorrow morning, in 2 years, in 5 years, in 10 years? Nobody has a clue. But the price and the matter is, today we don't want to increase our exposure on this. And -- but what we want to do is to have a capacity, which is going to be sustained over a long period of time to deliver 2-plus FPSO per year.

Okay. And just going back to -- sorry, and just while I've got you on the phone. Just going back to that point, when you're talking partnerships. Could you sort of explain that a little bit more? Bearing in mind, your Indian capacity, you're in, let's call it, in-house capacity. Where would the partnerships fit in if you're not looking to push harder? I’m just trying to square that circle, sorry.

Yes. I mean, it could come from a different aspect, and it could come from critical components in our FPSO, which are long lead items and the relationship that we have built over the years with some key suppliers. It could be on the fabrication also with a number of critical suppliers that we have. And the fact that we keep working with the same supplier for a period of time or we building the relationship is really a sign of this. And it could be with partnership on the engineering side. So it's really not one answer to your question. It's a broad relationship across the value chain.

Okay. And then just with regards to the health and the possibility of those being actually allocated to specific projects by the end of this year and another hull or hulls taken on board for the same view going through '22, '23?

Listen, you know us well by now. You have seen our track record -- when we develop in anticipation, we do it because we have an idea in mind. So it's an idea today. It's not a commitment. We'll see when the commitment is going to come. And if and when the commitment comes, the follow-up of the program will happen.

Yes, Bruno. I also know your ideas are not dreams. They normally crystallize quite quickly. Okay. And just for Douglas. I remember the bond market was part of the funding platform that you were looking at. Has there been any further developments on that front?

So yes, we -- obviously, we tapped into the bond market for refinancing of [indiscernible] earlier this year, and we are looking to see whether we can do that again, especially in Brazil to free up bank capital to fund upcoming projects. That's where I'd say. When it comes to capital markets, that's where our focus is at the moment longer term. So there could be possibilities to do things at a portfolio level, and that's something that we keep under review. But for now, the project, the focus on the kind of releveraging the backlog, if you like, is at the project level.

Your next question is from Mr. Quirijn Mulder, ING.

Yes. 2 short questions from my side. One is about the discussions with Exxon about the option to take out the Liza Destiny, the Unity and Prosperity. So is there any progression you can mention? And the second question, again, about the bills. Is it still correct that #5 was more earmarked for projects than #6 and that we can expect that you have -- that #6 is more on-spec than on the project, is that correct?

I'm not going to comment on your last question, and we have never commented on this. This is when we commit to [ her ], then we have done that over the past few years. We always say they're in anticipation. Obviously, we have a plan what this anticipation could be or might be, but by definition, by anticipation. So it's -- we cannot provide further information on that. With regard to the discussion about the timing of the Lease and Operate contract, BOT contract with ExxonMobil in Guyana. Again, the ongoing discussion is part of the interaction that we have, but no definite answer on this. As soon as there is a definite answer, obviously, we would advise the market.

Next question is from Mr. Thijs Berkelder, ABN AMRO.

Yes. Follow-up on floating wind. Maybe a short update on the progress of the French project. And secondly, there are big projects now being looked at in Scotland, Norway, France and the U.S. It’s in the news. I know where [indiscernible] name SBM Offshore being mentioned as one of the potential suppliers. Can you maybe explain?

Yes, because we are progressing hidden. One of the good things that we have is that we're making a lot of progress in the Floating Offshore Wind. But not having gone to the step of quoting a company with no substance. We don't need to be naked in front of everybody and tell everything that we are doing. Having said that, what I would like to say is that we're making progress on the project, which is under construction. There are some time line in term of production. We're making progress also in the evolution of the technology that we're having to decrease significantly, the cost for the future -- for the future project. We are positioned in a number of fields, not only as a turnkey supplier, but more broadly, potentially as a developer. So we're doing a number of things there, which today are under the radar screen. We are probably going to shed a bit more light on this at half year. But I feel privileged today of not making -- being naked in front of everybody to tell you what we're doing in something where there is a limited adjustment.

[Operator Instructions]

Okay. So thank you. Since there is no further question, thank you very much for joining us today. If you have any further question, please do not hesitate to contact us. In the meantime, have a good day, and you can now resume a normal activity. Thank you.

Ladies and gentlemen, this concludes the SBM Offshore Q1 2021 Trading Update. Thank you for attending. You may now disconnect your lines. Have a nice day.