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

Ladies and gentlemen, thank you for holding, and welcome to the SBM Offshore Half Year 2024 Earnings. [Operator Instructions]. And just to remind you, this conference is being recorded. I'd like to hand over the conference to Mr. Oivind Tangen.

Welcome, everybody, to the SBM Offshore Half Year 2024 Earnings Call, and thank you for joining us. I'm Oivind Tangen, CEO of SBM Offshore, and I'm joined today by Douglas Wood, our CFO. I will start with our main achievements for the half year, after which, Douglas will go through our financials before I conclude. As always, we welcome your questions after the prepared section of this call. Thanks to our great teams, we have delivered an excellent performance over the first half. Under our Ocean Infrastructure platform, which covers our existing business under Turnkey and lease and operate, we delivered a strong set of financial results with EBITDA increasing versus the same period last year by almost 40% to $620 million. As a result, we are increasing our EBITDA guidance to around $1.3 billion. Thanks to the award of Jaguar, our backlog reached another record level at $33.7 billion, which translates into $9.6 billion of net cash or around EUR50 per share. Given these results and the very high level of completion of the 3 projects due to start-up next year, we are launching a new share buyback program of EUR65 million on top of the previously announced EUR65 million share buyback program. FPSO Almirante Tamandaré, sailed away as scheduled on August 1 and will benefit from our Fast4Ward program learnings as it transitions from construction to operations. The next generation of projects like our Jaguar FPSO, are already seeing the Fast4Ward benefits from inception of a full life cycle of learnings. Excellence in performance is created through standardization and focus. We have taken steps to rationalize our business in Angola to focus on lease and operate, acquiring from Sonangol their share in the 3 FPSOs we operate, and selling them our share in the Paenel yard. As always, whether we execute or operate, safety is our top priority. The total recordable injury frequency rate stands at 0.09 below the yearly target and has been consistently on this level through several years, a clear demonstration of our strong commitment to safety. Under the transition platform where we secure new opportunities and develop new Ocean Infrastructure solutions. We secured the FPSO Jaguar contract award, the fifth FPSO awarded by ExxonMobil to SBM Offshore in Guyana. This award follows the sale and operate model, bringing accelerated cash, we expect to see 50% of future awards use this model. Then this morning, we have announced the award of a 20-year lease and operate contract for the FSO supporting Woodside Trion field development project in Mexico, positioning the company in a new strategic region and diversifying our client portfolio. Our 8 Fast4Ward MPF hull has been reserved by TotalEnergies for the Block 58 development in Suriname, and in line with our strategy to have one hull built in anticipation, we proceeded to order the ninth fall to maintain our unique market positioning. Together with further hull options, this will allow us to derisk future project schedules in a tight supply chain market. And finally, we are applying our expertise in Ocean Infrastructure solutions to position the company for a long-term in a number of alternative energy markets. In July, Ekwil, our pure-play Floating Offshore Wind venture with Technip Energies was launched. Later in the month, we signed an MoU with Ocean Power to deliver standardized low-emission floating power generation concept using carbon capture injection and storage. The fundamentals driving the strong demand we see for FPSOs have not changed. Given the pace of development of sustainable and affordable alternatives and the supply gap created by the decline rate of existing oil fields, the new field developments are required to meet demand. And FPSOs is the solution of choice to meet this demand, given deepwater projects are carbon and cost efficient. And SBM Offshore is a leader in this market. Large scale deepwater developments have low breakeven prices ranging between $20 to $35 per barrel with the greenhouse gas emission intensity around 40% lower than oil and gas industry average. Through our Fast4Ward program, we are helping our clients derisk their projects and enhance their cost competitiveness. And under our emissionZERO program, we have technologies ready for deployment, which reduce emission intensity even further. In this context, the market outlook for deepwater FPSO is strong and our tendering pipeline remains robust. Within the next 3 years, we see 40 potential FPSO awards, 40% of which are within the company's targeted market of large and complex FPSOs. With the capacity to have 6 FPSOs at different stages of completion concurrently, we remain disciplined in selected high-quality projects to ensure we deliver value to our stakeholders. We have a unique offering over the full FPSO life cycle. Our standardized product offering enables us to accelerate and derisk field developments and rapidly transition from execution to operations where with almost 400 years cumulative operating experience, we offer high levels of reliability and uptime. Then at the end of the life cycle, we use responsible recycling options to the highest international standards. The commercial models through which we deliver this unique value propositions are evolving. And we now expect to see more sale and operator words like Jaguar with an accelerated cash flow profile and no or very short-term financing. Douglas will explain the differences of these models a bit more in detail in a moment. Turning to project execution and operations. We have seen good performance in the first half. The 3 FPSOs under construction have achieved a very high level of completion, well above the 75% mark. These are the last units which have lived through the pandemic and the rapid increase in global inflation. As a result of this high level of completion, we now have a derisked project portfolio and our new projects like the Jaguar is benefiting from the learnings from these projects from the start through our Fast4Ward philosophy. Another key area of focus is a mission. Our team's effort and focus on flawless commissioning drives down the mission and is setting new benchmarks in the industry with an average duration for readiness for gas injection below the 60-day target. In line with company's 2030 intermediate targets, flaring intensity is reducing from 28 kilograms of CO2 equivalent per barrel in 2016 to 15% in the first half of the year, which is a 47% decrease in less than 8 years. Finally, the new build units benefiting from the Fast4Ward programs have a low emission intensity ranging between 8 and 12 kilograms of CO2 equivalent per barrel. As already mentioned, we maintained our strong safety track record and the uptime for the first half of 2024 stood at 96.4%, slightly lower than usual as 2 units experienced shutdowns for part of the period. One has restarted and is back to normal operating levels. And for the second, we are looking closely with all parties involved to resume operations. Now over to Douglas for more details on the financial results.

Thank you, Oivind, and good morning, everybody. So, as you've heard, we're on track to beat our initial EBITDA guidance for 2024. The $100 million upgrade increases this to around $1.3 billion. And there is material potential upside above this where, as you may have seen from the press release, ExxonMobil Guyana has indicated that it's contemplating the exercise of its contractual purchase options for FPSOs prosperity and destiny during the second half. Now if we look at the key financial metrics, the award of Jaguar has driven the order book higher to $33.7 billion at the first half, and that's despite the consumption of more than $1.8 billion revenue for the period. If we look at the backlog on a net cash basis, the Jaguar award has helped increase this to $9.6 billion. That's the equivalent of nearly EUR50 per share. And note that we're now including Turnkey in the net cash backlog, I will explain the details in a moment. Turning to the P&L metrics. Revenue was over $1.8 billion compared with around $1.5 billion in the year ago period. In Turnkey, revenue increased to $662 million compared with $558 million for the first half last year. And in addition to the impact of Jaguar, we saw an increase in brownfield fleet support activity. And this was partially offset by the fact that Prosperity and Sepetiba moved into operations plus lower revenue from the more mature projects in the portfolio as these approach completion. And the startup of Prosperity and Sepetiba, along with an increase in reimbursable scope, drove an increase in revenue of $245 million in lease and operate to $1.17 billion. This impact was partially offset by the fact that Liza Unity moved to an operating contract following the purchase last year. Then turning to EBITDA. This increased to $620 million versus $457 million in the year ago period. Turnkey EBITDA increased by $25 million to $12 million negative at the end of the first half, driven by the same factors as revenue plus the absence of Floating Offshore Wind pilot project investment booked last year. So, at the first half, phasing effects linked to the evolution of the construction portfolio are visible. But as ever, to reiterate that through the cycle, we very much expect Turnkey to generate positive cash flow and margin, particularly in the context of more sale and operate awards. So, we see Turnkey turning positive in the second half, and that's before the potential vessel purchases in Guyana. The Lease and Operate EBITDA was $679 million, around $133 million higher than the first half last year. Again, the increase was driven by the same factors as for revenue, plus an impact from the business rationalization in Angola. So, to round off the story on EBITDA. Other EBITDA was $47 million negative, a $5 million improvement on the year ago period. On net debt, this increased by $455 million, reflecting drawdown on debt to support the current construction portfolio. Down last but very much not least, based on the performance so far this year and the outlook for liquidity and cash flow, we're launching today an incremental buyback of EUR65 million, which is expected to complete by the end of April next year. Now we published this slide before, but we've included it again today to emphasize the financial impact of the fact that the new opportunities we expect to win will use a mix of different models. As Oivind already highlighted, key to note that there are different ways of structuring the delivery of our same unique life cycle model, which is derisked on-time project delivery, rapid startup, exceptional high level of availability and reliability and operations and then safe and sustainable recycling. So, on this slide, we've set out the net cash profiles of the 3 models that we have in the portfolio, sale and operate, BOT and Lease and Operate. As we've been highlighting this year, we're seeing an increase in appetite among clients for the sale and operate model as in the case of Jaguar, where effectively the client provides all or a major part of the funding, paying for and purchasing the vessel in the EPC phase with an O&M contract following after. This results in acceleration of cash and margin booked in Turnkey Under Directional, which follows cash flow with a smaller but still meaningful cash flow in the operations space. BOT, the model we've used for the second, third and fourth Guyana units also results in a relatively accelerated cash flow. However, the key difference with sale and operate, while the material cash comes pretty early, we need to wait for this until the operating period with the big impact coming from the purchase post-startup as we saw with Unity. And recently, this has been driving some of the variability in margin Under Directional in Turnkey. Finally, Lease and Operate, which I think you are all pretty familiar with, the majority of net cash for SBM comes towards the end of the operating period following repayment of the project debt. Our current view is that at least 50% of new opportunities will follow the sale and operate model. And this would result in accelerated cash flow during the Turnkey phase and therefore, improve the overall Turnkey P&L Under Directional going forward. But as evidenced by today's Trion award, there is still demand for lease and operate projects, and we remain confident that we're able to access a broad range of sources of financing to continue to support this model. Finally, if we do see 50% pure sale and operate, over time, our balance sheet will deleverage, and this would obviously also be helped by the potential early purchase of vessels in Guyana. Now here, you see a real-life example of the impact of the sale and operate model on our net cash backlog, where the award of the Jaguar FPSO has been the main driver of the increase from $9.3 billion to $9.6 billion to the nearly EUR50 per share. And you can see this impact reflected in the earlier years. So, we're therefore, now including the net cash component of the Turnkey backlog. So let me explain how we've done this. First, we include in-hand turnkey projects on a gross margin basis. Second, for the period where we have vessels under construction currently to end 2027, we include the Turnkey overhead and taxes, net of the margin we typically generate from our services business. And this is the net circa $50 million per annum investment we have previously guided for. It's important to note that this investment in Turnkey overheads is also supporting the acquisition of new awards for which we don't count ourselves rich in this backlog, but there is obviously potential for material upside to be generated here. So now in the backlog, we have the full picture of Turnkey, the BOT purchases and Lease and Operate, including debt repayment, overheads and tax in these segments applicable to the backlog. Now it's hard to forecast the year-by-year materialization of the Turnkey backlog. So, for simplicity, we are giving aggregate guidance for the duration of the existing construction portfolio, as you can see on the slide. To note that Trion, which is a very meaningful project but much smaller than the latest FPSO projects is not yet included, and we have not anticipated the potential early purchases of prosperity and destiny. Now we've seen some appreciation in the share price since the last update, but with the addition of new awards as anticipated, the disconnect with the implied value, at least as we see it persists. So, the incremental backlog we announced today underscores this view. And as we've already guided, when it comes to our annual cash return, we expect to focus on stepping up the structural buyback component of this where there is upside based on the existing backlog. And you can see this upside when we look at the net cash expected to be generated from the backlog up to the end of 2030 over the next 6.5 years. This is $4 billion. On top of which, thanks to the investment in Turnkey overhead that is now included, we should be able to generate incremental net cash in the period, particularly if we secure more sale and operate awards. From this $4 billion, as we've been guiding, we need to cover the remaining net equity of the existing projects with around $400 million to go. Then we have 6.5 years of corporate overheads included here. And our existing cash return commitment gives a bit more than $1.3 billion for the period to which if you add today's buyback, you get around $1.4 billion. We then have around $1.7 billion remaining for returns and to fund any future growth requirements, which, as we've previously communicated, we would expect to be lower than in recent years. So, there's, therefore, material upside for additional returns. And this is before further potential linked to growth, where, again, more sale and operate awards should generate accelerated cash in the period. Timing wise, as I just mentioned, we're still working through the remaining net equity investment, which consumes cash and liquidity in the initial part of the period, but the materialization of the potential purchases in Guyana and/or the execution of project refinancings would improve this picture and create more opportunity in the shorter term. So, we'll see how this picture develops for the remainder of the year and look forward to the next update at year-end. That's it from me. Now back to Oivind.

Thank you, Douglas. Very clear. So as an energy transition company, we are committed to providing the world with safe, sustainable and affordable energy. With Ocean Infrastructure, we are dedicated to executing the growing backlog with excellence as new vessels join the fleet. And with transition, we are adopting to new business models and looking at enhancing the backlog through our emissionZERO program on the FPSO side, but also leveraging our overall expertise to profitably enter new Ocean Infrastructure markets. As we look at our key ambitions, although the average size of FPSOs has increased, we are maintaining our capacity to have up to 6 FPSO projects under construction concurrently, and we expect to have a near 0 emission FPSO ready for the market in 2025. Always with the safety of our people coming first, we remain focused on our emission reduction targets. And in the course of the next decade, we expect to see new Ocean Infrastructure solutions make a material impact in growing our backlog. We are drawing on more than 60 years of experience in delivering Ocean Infrastructure projects as we develop new solutions to contribute to the energy transition and beyond. While we expect FPSOs to drive our business for at least the rest of this decade, we are very focused on developing such solutions, which will drive our business for the decades to come. Here, you see what we are currently focusing on in this space. We are market ready with a carbon capture module in partnership with Mitsubishi Heavy Industries for our near 0 emission with FPSO. Then we are looking to leverage our experience in marinizing carbon capture solutions in partnership with Ocean Power to collaborate on the floating power generation hub with CO2 capture. This could power offshore assets will be used for balancing power systems onshore. We have delivered a commercial scale reference for our Floating Offshore Wind technology, which we will now take further through the Ekwil JV. Then we are working to leverage our terminals experience to enter the ammonia and hydrogen markets. A few words to conclude. Through the Jaguar and now Trion contract awards, we are demonstrating our ability to materialize the forecast growth upside. This has led to an increase in the backlog to a record $33.7 billion level, $9.6 billion in net cash terms or around EUR50 per share. The fact that we expect at least 50% of new awards to use the sale and operate model like Jaguar should accelerate the cash flow from our backlog with a reduction in borrowing levels over time. The performance so far this year and outlook are the catalysts for the incremental step-up in the share buyback program. But as you saw, there is certainly upside here with some potential for cash acceleration options in the short term. Finally, our strong results during the first half have led us to increase the guidance for the year. Directional EBITDA increased to around $1.3 billion from around $1.2 billion. Directional revenue increased to above $3.8 billion from around $3.5 billion. Obviously, if the purchase of Destiny and Prosperity occur in 2024, we will revise the guidance accordingly once the final details of the purchases are confirmed. Thank you for your attention. The floor is yours for questions.

[Operator Instructions]. Our first question today is coming from Mick Pickup, calling for Barclays.

Two questions, if I may. Firstly, Douglas, can we just be perfectly clear on your net cash flow chart. So, I think historically, we've taken off the chart you gave, the corporate number and then the Turnkey SG&A and cost in that. You're now saying that's included in that Turnkey net cash. So, all I need to take off the valuation of that chart now is that $75 million you're using in other EBITDA as a proxy. Is that correct?

Yes.

So, I don't need to make an estimate for Turnkey costs anymore. You've done that job for me as well.

We have for the period of construction.

There's no backlog after that any how, is it?

Exactly.

Now second question, can I just ask about Trion and the FSO. I think your message has been, we've got a limited skill set. We choose our opportunities carefully. There's lots of $3 billion opportunities out there. Why are we doing a much smaller unit?

Mike, that's a good question. So, there are a few elements to that. So, we want our prospects to have to be meaningful and have a good return level. But there is also strategic parts to the equation. So, it allows us to enter Mexico, obviously. And Woodside is a great client to add to our client portfolio. And you will know, knowing the history of the company that turrets and disconnectable turrets can be certainly an enabler in future projects and keeping that competency alive in the company is also fundamental to the way we see ourselves in the Ocean Infrastructure space in the future. So, a lot of good elements to that job and a very, very nice job for the company.

And how big a turret is it?

A relatively small turret. As you know, FSO is just a low-pressure transition of oil, so it’s a small turret but technology-wise, the disconnectable space in the hurricane area it's a good enabler, which is also why SBM is the provider of the FSO not any other company.

And if I can be rude, can I just do another question that I've just thought of here. That Turnkey net cash of $400 million, if I add 3, 4 years of what you said $50 million a year, takes you up to $600 million. You've got $4 billion of backlog doing $600 million in net cash. I thought the margin was 20% plus in that business.

Well, it's consistent with the historical IFRS margin, which is around 18%, it’s up and down. But yes, roughly.

So, you've included about to about 18% of that minus 200. And then there's rounding it. I'll hand it over.

[Operator Instructions] We now go to Jeremy Kincaid, calling for Van Lanschot Kempen.

I just have one question. Obviously, you've explained quite well that the cash flow velocity is improving quite well with the sale and operate model, but it also looks to be improving in the BOT model as well as operators look to be buying those vessels back earlier than anticipated. Could you just talk to some of the dynamics there? Why are people doing this? What's in it for them? And do you think that trend will continue if you sign any other BOT deals in the future?

Jeremy, so the BOT projects that we have with ExxonMobil, Guyana, and all of them and actually included the lease and operate project. They have a purchase option. So, it's a question for really the client in terms of they have the option and how do they want to optimize their cash flows. So, it's basically, they have the option, and it's really down to them to figure out what works best for them. So, in the case of prosperity and destiny, they've indicated that they're considering it, and we need to see the next steps.

As to why it's the best option for them?

Well, they're always going to - I mean prosperity they have; we’re going to have to buy by the end of next year. So, it's a small acceleration. But then it's really down to them and how they want to manage their operations, their cash flows.

[Operator Instructions]. We’ll now go to Andre Mulder of Kepler Cheuvreux.

A few questions. So firstly, on Suriname, I see some diverging levels in terms of the profitable reserves anywhere from $700 million to $2.3 billion. Can you fill us in what kind of recoverable serves you think there are in that Block 58? Second question, I've seen the extension of the Mondo, what's the position of the Saxi. Third question is on Floating Offshore Wind. You're mentioning a number of projects, number of areas. Projects in U.K. and Canada will remain in your scope. What's happening to [ Kondavil ], a U.S. project? I think those would be my questions for the time being.

Andre, thank you for your question. So, Suriname reserves, obviously, that is the heart of the oil company's competency and certainly not at the heart of ours. So, we only prepare our commercial offering in line with what the clients are asking in terms of providing FPSOs adequately sized to the reserves as they have estimated them. So, I can't formulate any opinion on that. For Block 15, so Mondo's extended as a matter, of course, in both Mondo and Saxi coming towards the end of their contract term. So, I think it's a discussion ongoing as to the further strategy for Block 15 in Angola. And with our current ownership structure, as reported in Angola, we got well positioned to have a good discussion around how these assets may or may not be extended further. On Floating Offshore Wind, I'll hand it over to Douglas.

So, to clarify, going forward, the JV equal is going to be the vehicle through which we pursue the EPCI market with our and also techniques floating foundation technologies. But we already, as you know, had a number of Floating Offshore Wind development projects in our portfolio in the U.K., Northern Ireland, Canada and actually also the U.S., although Cademo, it's a smaller project. So, we're continuing to work on those.

A follow-up question on Suriname. It's already clear whether it would be Turnkey or lease and what kind of length of lease contracts are you looking at? And also, a question on, I do not know whether it's also in directional. But first, I saw this net gain of $32 million. That's turning into a lease where you would have expected to be in Turnkey. Why is it there? And is it in the same level that we see for directional.

So, let me take Suriname. So currently, the Suriname job is under a commercial process, which is for an EPC contract for the provision of the FPSO. So that's where it is today until any FID is given, things may or may not change. But that's where it is today. So, you're referring -- I think are you referring to the Angola business rationalization.

That's right.

Good to clarify. So yes, there's an impact under IFRS from that transaction. And it's roughly a similar one in directional from the consolidation of all the various elements of that rationalization.

And normally, you will see some changes appearing in the ownership structure, but those results coming into Turnkey rather than Lease, why is it under Lease this time?

Because it's a Lease and Operate portfolio basically. So, we've increased our share in a number of FPSOs, including Angola. So, it's a lease and operate focus transaction.

[Operator Instructions]. We now go to Daniel Thompson, colleague from BNP Paribas Exane.

Just one question from me. It looks like the coverage of your second half revenue covered by backlog is sitting at over 100%. So just wondering if you could talk through the various puts and takes going into that. The guide for the $3.8 billion revenue for the rest of the year. Is it coming down to the uptime, getting back up to where you expected or have you risked the construction that's scheduled a bit? Just any color there that you can provide?

So, things never phase perfectly. You get different timing effects. A lot of our operation revenues, for example, are based on reimbursable items. So that depends on what and when the client needs and the maintenance planning. So, it's not always a linear thing.

Our next question will be coming from Thijs Berkelder of ABN AMRO - ODDO BHF.

Congrats with strong H1 results. First question on the timing of the purchase options by ExxonMobil. Can you maybe give a bit more explanation when to exactly expect them to list these options and/or what is needed for them? Do they need to have, let's say, signatures from regulators, government or something like that to act on that or signatures from the co-shareholders to exercise these purchase options? That's my first question. Then on the gain reported lease and operate is only related to Angola, and related to that, can we expect also a gain or loss related to the offshore wind JV transaction to happen? Third question for Douglas, in case the options for the Destiny and the Prosperity are indeed being lifted. Can you give us some guidance on where to expect net debt to land at the year-end '24? And/or should we expect an additional book gain of, let's say, $600 million, $700 million or so?

I’m struggling to keep up with the number, but I think I got it right. So first up, yes, so it's going to be in the second half. So, we had a similar situation last year and we ended up, I think, announcing in November. What needs to happen is they would give us a formal notice and then we need to finalize a sale and purchase agreement. That's basically what has to happen there. And then relative to the impacts, we would see more than $1 billion. It depends on the timing and everything. But directionally, if you like, very roughly above $1 billion impact in terms of the reduction on debt rough EBITDA. Again, it all depends on timing, but somewhere north of $500 million EBITDA impact, if that helps. Then you asked about Angola. It's just the gain in lease and operate but it's just Angola. And then there was a question, are we going to get losses from Ekwil, answer which is, no. And I think I got all of your questions.

You did. Maybe a follow-up question. I think the Destiny and Unity are prepared for, let's say, gas exports to shore. What does that change mean for SBM Offshore and for your contracts with ExxonMobil.

So, it's a relatively straightforward sort of brownfield job that we are executing on the assets. And after which, it has no contractual or material impact to us, it's just been diverting the gas stream to shore rather than down the hull. So that's it.

And then you started your presentation talking about further hull options. Can you give us a size how you've ordered 9 hull? How many options do you have in hand right now?

We ordered the 9 hull with CMHI as we're finishing up our MTFC, we placed for MTFC and we have secured a slot sort of sliding slot for MPFE. And then we have 6 and 7 with SWS. So, we have 3 further slots at least. This takes us a few years ahead, so we can -- we're always in anticipation mode to help them manage their capacity. So, it's not about how many slots more than the program that runs.

And related to that, looking at your ordering these sales in China. Looking at sanctions in China. Is there any risk or potential to also order hulls or top size again outside China?

As any emerging risk to our operational or to our business model, we are evaluating that continuously. And we also do, of course, benchmark yards across the world to make sure we stay competitive. So that is a part of the equation that we're working very actively.

Maybe final from my side for now. Can you explain why now, let's say, double the share buyback in terms of amount? What is behind the doubling? Is it kind of let's say, first step towards real cash returns in 2025, should I see it that way?

So well, I guess I would back to, well, not defer, but at least in what you're inferring because I think that $220 million a year is already a pretty decent cash return and especially consider our track record for more than, say nearly [ from ] 2016, we've returned a very material amount of money to our shareholders. So yes, we're very much focused on the returning cash, pacing it in line with the materialization of that cash flow. Then in terms of the driver, we obviously delivered a strong set of results for the year. The portfolio is performing well. We've mentioned, we're finalizing the earlier projects in the portfolio, which are anticipated to start up next year. So, there's less risk in that part of the portfolio, which was impacted by COVID and supply chain. And so, what we decided to do is based on all of these as well as looking at our liquidity, our cash flow forecast is double the existing buyback, which will enable us to keep going at the same pace through to the first quarter next year. And then as I said, let's see how things develop in terms of the materialization of potential cash acceleration options. And then as ever, we take a look at the cash return strategy at the year-end.

We now have a follow-up question from Andre Mulder of Kepler Cheuvreux.

Follow-up indeed, on the share buyback. After this doubling, have you fully utilized the potential that came out of this consent of April ‘24.

No.

Could you say how much is left?

Off the top of my head, no, but I know there’s still headroom.

And then the next step would indeed be to ask the AGM in '25 for another consent for share buyback. Are there any restrictions to that? We've seen in the past 10%, but are there any limits to that? Or can you ask for more?

Every year, we ask the shareholders for permission if you like, a standard option. It's a rolling thing. As I said, we always review our returns strategy at the end of the year when we'll provide a further update in February and then whatever it is that we decide to do, we'll make sure that we have all the requisite authorizations and approvals in place.

We have another follow-up question, this time coming from Mick Pickup of Barclays.

Just a quick one. There was a press release last month about floating power generation, you're getting involved in that. I know it's something you mentioned at the end of the Capital Markets Day. Can you just talk about what the opportunity set is there. And I believe your partner used to be embedded with the cylindrical floating company. Why are they now talking with you or working with you?

Ocean Power is a Norwegian startup with certainly heritage from the cylindrical standardized hull. Right now, we are exploring business model and technical feasibility for decarbonized power supply to offshore assets or as part of lowering the emission of existing production facilities in the world and potentially also for future greenfield development, where you could think of consolidating power supply through a power barge providing electricity to offshore assets. So, we're exploring that. It's early days. It's quite exciting. There will be more to see about that further into the year.

[Operator Instructions]. We do not appear to have any further questions. Mr. Tangen. I'd like to turn the call back over to you for any additional or closing remarks.

Thank you. All right, thank you all for your engagement in SBM Offshore. We're very happy with our results and look forward to communicating more with you through the remainder of the year. Have a nice day.

Thank you. Ladies and gentlemen, thank you for attending. This concludes the SBM Offshore event call. You may now disconnect your line. Have a nice day.