SOURCE: SBM Offshore N.V.

July 11, 2008 11:45 ET

COST OVERRUNS ON SBM OFFSHORE PROJECTS

SCHIEDAM, NETHERLANDS--(Marketwire - July 11, 2008) - Input costs on certain of SBM Offshore's major projects have now exceeded the provisions and contingencies previously budgeted due to growth and acceleration of the work scope required to deliver the facilities.

These extra costs will weigh heavily on the mid-year turnkey systems results which are expected to be well below the comparative period for 2007. The shortfall will be partially compensated by the lease and operate activities, which have performed ahead of prior year and ahead of the 2008 budget. Mid-year results will be announced on 19 August 2008.

At this stage, given the input cost increases reported above, the Company's 2008 full-year profit expectation falls by up to 20% of the original target of US$ 280 million. This reduction does not however take into account potential recoveries from claims and variation orders on major projects which are currently under negotiation with clients. These discussions are not sufficiently advanced to warrant inclusion of additional revenues in the mid-year figures, but are expected to be largely concluded during the second half of the year.

A conference call hosted by T. Mace (CEO) and M. Miles (CFO) is scheduled at 2 p.m. on 14 July 2008 to provide the opportunity to ask questions in relation to this release.

The dial-in details for the conference call are as follows: +31 20 531 5851

Replay dial in number: +31 70 315 4300 Access code: 14 71 61 #

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Contact Information

  • Contact person:
    Mr. Sebastiaan de Ronde Bresser
    Telephone: (+377) 92 05 85 15
    Mobile: (+33) 6 43 91 93 12
    Fax: (+377) 92 05 89 40
    E-mail: Email Contact
    Website: www.sbmoffshore.com