SBMO.ASSBMO.ASAMS
Loading
Oivind Tangen: Welcome, everyone, to the SBM Offshore full year 2024 earnings call, and thank you for joining us. I am Oivind Tangen, CEO of SBM Offshore; and I'm joined today by Douglas Wood, our CFO. I will start with our main achievements for this 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. Please note the disclaimer. SBM Offshore has been at the forefront of delivering innovative ocean-infrastructure solutions for the offshore energy sector for over 65 years. Our strategic focus on building a resilient backlog and diversifying our portfolio ensures that we are well positioned to achieve sustainable growth and deliver consistent shareholder returns, all while transitioning our business within the blue economy. We are driving progress through our True. Blue. Transition. promise. Our strategy is to achieve greater progress both in our core operations and in new markets by broadening our offering of energy-related solutions and then our horizons into other sectors. To achieve this, we focus on 2 key areas to create long-term value for our stakeholders. Advancing our core. This is about enhancing our core operations, aiming for a net zero future and a just transition. By developing ocean-infrastructure solutions that promote decarbonization and increase the efficiency of traditional oil and gas production, we ensure sustainable growth and long-term value. Pioneering more. Here, we seek to secure new business and explore new markets within the blue economy, crucial for addressing energy security, environmental and climate challenges. By partnering with progressive organizations, we unlock opportunities and drive sustainable economic growth, positioning ourselves at the forefront of innovation and profitability. We consistently provide solutions that generate value, meet specific performance targets and offer high delivery assurance. Our comprehensive approach ensures that not only do we deliver projects, but also long-term partnerships built on trust and excellence. The 2024 results illustrates this well. Our SBM teams delivered across all segments of activity, and we uphold -- upheld our absolute priority to protect our colleagues and worksite personnel. I am pleased to share the details of that performance and what's driving SBM's growth, including exceptional financial performance, shareholder returns, execution excellence, new awards and progress on diversifying our offering for the future. In short, a strategy that pays. First, we achieved record level results in both revenue and EBITDA, reflecting 3 new awards and the purchases of FPSOs Prosperity and Liza Destiny by ExxonMobil Guyana, increasing our backlog once again to a record level. From this outstanding performance, we proposed a circa 30% increase in shareholder returns to around $1.59 per share. At this level, we would see a minimum aggregate of $1.7 billion over the next 6 years to 2030 with upside potential from future growth. Douglas will give you further details in a moment. The operational achievements from the ocean-infrastructure and Win & Grow value platforms reflect our continued focus on excellence across our business model. Major milestones include 3 fast-forward FPSOs coming on stream this year with a combined capacity of 655,000 barrels of oil per day. Cumulatively, this will increase our installed capacity to 2.7 million barrels of oil per day in 2025. With these achievements, we are further derisking our construction portfolio. In addition, the global fleet delivered high uptime for 16 units in operation, including an excellent first year for Prosperity, exceeding industry standards. Along with high activity levels in both EPC and asset management scopes, we maintained safety as a top priority and concluded the year with no significant injuries to personnel, meeting our targets in both leading and lagging safety performance indicators. This performance is driven by a robust HSSE and continuous improvement culture. Regarding our commercial activities, our excellent performance positions us favorably for growth, especially in a strong FPSO market. We secured two FPSO awards following the sale and operate accelerated cash flow model, FPSO GranMorgu for TotalEnergies in Suriname in joint venture with Technip Energies and FPSO Jaguar for ExxonMobil Guyana. We also secured a 20-year lease contract from Woodside, providing an FPSO with a disconnectable turret mooring system for the Trion project in the Gulf of Mexico. This diversification of our portfolio with new clients and basins in new countries has been achieved while remaining disciplined with the divestment of FPSO Kikeh in Malaysia, which closed earlier this year and the rationalization of the fleet in Angola. Given the robust market outlook, we ordered our 9th and 10th MPF hulls in 2024, which means we now have 2 hulls available to optimize our tendering activities. As ever, we will remain selective in pursuing high-quality projects and initiatives that align with our goals, maximize returns and minimize risks. And we continue to develop strategic partnerships to decarbonize and diversify our offering by collaborating with companies like Mitsubishi Heavy Industries with whom we've developed an integrated carbon capture solution for FPSOs. We finalized the joint venture with Technip Energies on floating offshore wind. And most recently, we signed an investment agreement with Ocean-Power to jointly develop a low-emission offshore floating power generation concept. The demand for FPSOs is set to increase, driven by sustained oil demand with declining existing supply, new developments will be required. Quality deepwater projects are economically competitive with comparatively lower emissions. And as such, deepwater production is expected to grow this decade. Our FPSOs are, therefore, the go-to solution to bridge the demand-supply gap. We see 40 prospects in the next 3 years with 16 in our core market of large and complex FPSOs. Amongst the promising regions emerging in deepwater are key markets, including the Atlantic Basin around Brazil, Guyana, Suriname and West Africa, including Namibia. Our unique Fast4Ward offering is optimized for the Atlantic Basin, where we will have 6 units operating this year. This unique offering is deeply rooted in our extensive experience in ocean-infrastructure. We place a high premium on reliability and capitalize on the full life cycle of learnings that we've accumulated. With the start-up of 3 new vessels representing 655,000 barrels of oil per day installed capacity, our fleet -- our total fleet installed capacity will reach 2.7 million barrels of oil per day this year. This growth is possible because continuous improvement is systemically embedded at every stage in our business model, driving a culture of excellence across the full product life. Through our Fast4Ward concept of standardized MPF hulls, we have a consistent approach to accelerating time to market, which derisks field developments and set industry-leading performance standards as demonstrated by FPSO Prosperity in early 2024. High levels of uptime and an excellent track record in asset management is evident with the 96% uptime for 16 units in 2024. With over 400 years of cumulative operating experience, the quality of our services is on par with the high quality of our products. Equally important to being a reliable partner throughout the entire project life cycle is adhering to responsible recycling and waste disposal policies in line with EU and international standards. Our most recent decommissioning project of the Deep Panuke platform in Canada stands at 97% for materials recycled, repurposed or sold. Our Fast4Ward program is setting the pace for deepwater developments. The first Fast4Ward FPSO went on hire in February 2022. In 2025, we are set to bring 3 major projects on stream, increasing our total number of operating Fast4Ward FPSOs to 6. Almirante Tamandaré achieved first oil on February 15, 2025, becoming the largest FPSO to operate in Brazil with a capacity of 225,000 barrels of oil per day in the Mero field. It is the first to receive Sustainability-1 Notation in Brazil, recognizing the fruits of our emission reduction efforts. Alexandre de Gusmão will add 180,000 barrels per day production capacity in the Buzios field. The unit sailed away in December 2024 and will be the eighth unit operating in Brazil on track for first oil around mid-2025. One Guyana will add 250,000 barrels of oil per day production capacity to the Stabroek field, making it the largest vessel in Guyana and bringing the total production in country to around 900,000 barrels per day. In just 4 years, SBM's 6 Fast4Ward FPSOs will be responsible for 12% of the overall deepwater production. With that, I'll leave it over to Douglas for more details on the financial results.
Douglas Wood: Thank you, Oivind, and good morning, everybody. So our strong financial performance in 2024 with record levels of revenue and EBITDA at $6.1 billion and $1.9 billion, respectively, reflects the great efforts of our teams in materializing our committed contract backlog. And despite the fact we materialized more than $6 billion from this backlog during the year, thanks to the addition of the 3 new awards in 2024, not only did we manage to replace this, but to add to it, ending the year around $5 billion higher at a record $35.1 billion. So the P&L results speak to our ability to execute and operate our business and then the backlog to our ability to maintain and grow our business. On a forward-looking basis, we expect to generate $9.5 billion net cash from our backlog, and that's the equivalent of nearly EUR 52 a share. As a result, we are increasing our cash return to $1.59 per share, a 30% increase via a proposed $155 million dividend and $150 million share buyback program. This increased return level represents a cash yield of 9% per share and would result in a minimum aggregate return of $1.7 billion over the next 6 years to end 2030. As we'll see in a minute, there's upside for returns from, one, the existing net cash backlog; and then two, new awards, where we anticipate that the majority of these in the next few years will follow a sale and operate model with an accelerated cash flow profile and no equity investment requirement. But first, to review the key metrics for 2024 on a directional basis. Starting with the backlog, the foundation and generator of our substantial long-term cash flow. This increased to $35.1 billion, the main drivers again being the awards of FPSO Jaguar, the Trion FSO and FPSO GranMorgu. Then on net debt, this decreased by almost $1 billion to around $5.7 billion. This resulted from the repayment of the Prosperity and Liza Destiny financings following the sale of the vessels and was partly offset by drawings on project financing facilities to fund the construction portfolio. And next to the P&L metrics. So total revenue was $6.1 billion compared with $4.5 billion for 2023. And this 35% increase was driven by the Turnkey segment, where revenue was more than $3.7 billion compared with around $2.6 billion in 2023. We saw a positive impact from the new Jaguar and Turnkey awards under the sale and operate model. The sales of Prosperity and Liza Destiny and the finalization of the sale of a 13.5% share in Sepetiba to China Merchants Financial Leasing, plus finally, a good performance from Brownfield and project services. Then on a comparative basis, there was an offset from the fact we sold Liza Unity in 2023, the move of Prosperity and Sepetiba to the operating phase and lower revenue from FPSOs Almirante Tamandaré and Alexandre de Gusmão as those projects neared completion. On the lease and operate side, revenue was around $2.4 billion. That's an increase of more than $400 million compared with last year. And this mainly reflects the start-ups of Prosperity and Sepetiba and the acquisition of additional interests in FPSOs, N'Goma, Saxi Batuque and Mondo from Sonangol in June 2024. On a comparative basis, we saw reduced revenue from Liza Unity, which moved to an operating contract following the sale of the unit in quarter 4 2023. Then to EBITDA. So this was around $1.9 billion. It's just over 44% higher compared with 2023. Just like with revenue, Turnkey drove this increase, increasing by nearly $430 million to just over $720 million, the main drivers being the FPSO sales in Brownfield and project services, noting that being at relatively early stages of completion, Jaguar only contributed marginally to EBITDA and GranMorgu not at all. Then lease and operate EBITDA increased by almost $140 million to $1.26 billion, and the main elements here were the same as for revenue. Finally, other EBITDA was $89 million negative. It's an improvement versus the $101 million negative last year, where 2023 was impacted by costs associated with the establishment of our corporate business solutions center in quarter. Now there are different ways of structuring the delivery of our unique life cycle model, and we're confident that where necessary, we can still secure financing to support all models as evidenced by the $1.5 billion construction financing for Jaguar, which closed in the fourth quarter. However, based on our view of the pipeline of opportunities for the next 3 years, our expectation is that the majority, if not all of these will follow the sale and operate model. So this model results in the majority of the cash flow and P&L being generated upfront in the construction phase, noting that we only book margin and EBITDA after 25% completion. So then depending on the relative progress of different projects in the portfolio, this could lead to some volatility in turnkey margin and EBITDA. For example, I just mentioned that last year, Jaguar and GranMorgu had a sizable impact on revenue but not EBITDA. So this diluted the portfolio IFRS-based turnkey margin for the year. However, this was 18% on average for the last 3 years. Then on leverage here at the bottom, while our debt is well structured linked to individual projects and contracts and nonrecourse in the operating phase, we know that the optics at least of the headline multiples can raise questions for some. So from a leverage ratio perspective, the shift towards the sale and operate model results in a significant deleveraging. This is visible already today following the record EBITDA and circa EUR 1 billion net debt decrease, which results in a net leverage ratio of 3x EBITDA. This represents a reduction of almost 50% compared with 2 years ago. Going forward, earlier accelerated cash generation from sale and operate awards will result in a structurally lower level of financial leverage in our business, with debt, if any, being short-term and only during construction. So assuming no lease and operate awards in the next 3 years, if we add up scheduled project finance debt drawdowns and repayments up to 2028, which will include the full repayment of the debt related to FPSO Jaguar and FPSO One Guyana, as you can see on the bottom right of the chart here, we would expect a further circa 50% reduction of total debt by around $3 billion by 2028. Moving on to the net cash backlog. Again, despite the materialization of the backlog during the year, thanks to the new awards, we ended higher versus last year-end 2024 at $9.5 billion. This is a pretty good outcome considering the FPSO divestments, and it's also worth noting that while sale and operate awards deliver a similar NPV to lease and operate, because the cash comes sooner, the relative aggregate amount of cash is lower. The other thing you can see here is that the front-end loading of the net cash with around 40% of the backlog set to be delivered in the next 6 years. Now we started including the net cash component of the Turnkey backlog from the first half last year. So again, just a reminder on how we do this. First, we include in-hand Turnkey projects on a gross margin basis, net of contingency. Second, for the period where we have vessels under construction now to end 2028, we include the Turnkey overhead and taxes, net of the margin we typically generate from our services business. And this is a net circa $50 million per annum investment. An important thing to note about this investment in Turnkey overheads is that it's also supporting the acquisition of new awards for which we don't count ourselves rich in the backlog. Just like last time then, we've included this turnkey net cash backlog in our discounted analysis of the net cash value at various discount rates. And even given the recent share price appreciation, this still points to further upside, especially given that it reflects only the contracts we have in hand with no further growth. Now if you wanted to value this upside, you could take a multiple approach for Turnkey. So even, for example, if you half this year's turnkey EBITDA, applying a 4 to 6x multiple range, you get around $1.4 billion to $2.1 billion or around EUR 7 to EUR 11 a share versus the circa EUR 3 a share for Turnkey currently included in the discounted analysis. So, the backlog with the visibility and predictability that it gives us on future cash flow underpins our ability to offer stable returns with growth potential. So next to update on shareholder returns. Now last year, we updated our shareholder returns policy, introducing an annual cash return commitment, which provides flexibility to pay a portion of our annual cash return as a share repurchase in combination with the dividend. Under the policy, we aim to pay a stable cash return, which grows over time linked to growth in the backlog. We maintain the option to apply surplus capital for incremental returns on top of this. So this cash return was $1.22 a share in 2024, which we're proposing to increase by 30% to $1.59 a share, which would give a 9% cash yield. This will be delivered by a proposed $155 million dividend and the EUR 150 million or EUR 141 million equivalent share buyback announced this morning. A portion of the buyback up to $25 million will be applied to employee share programs such that the aggregate cash return for 2025 is $280 million, a 27% increase versus last year's $220 million, noting that the increase on a per share basis is higher due to the positive impact of the buyback program launched last year. And in line with previous guidance, we've prioritized the buyback component of this year's increase in the cash return, and we currently see this remaining the case going forward. The increase in the dividend component is purely driven by Dutch fiscal rules, which in order to allow a tax-free buyback require an aggregate dividend equivalent to the average of the last 7-year dividend after excluding the highest and lowest years. So this is an aggregate EUR 150 million, where just to be clear, the $155 million proposed dividend will be the minimum floor level. With the increased returns announced today, we're therefore maintaining our track record of increasing returns with further upside to continue to grow this. And you can see the visibility on cash and returns and the further upside that our backlog gives us when we zoom in on the net cash expected to be generated from this up to the end of 2030, the next 6 years. This is $3.5 billion on top of which, thanks to the investment in Turnkey overhead that's now included, we should be able to generate incremental net cash in the period based on our expectation that the majority of awards in the next few years will follow the sale and operate model. So from this $3.5 billion, as we've been guiding, we need to cover the remaining net equity for the projects we're currently finalizing, where we have around $250 million to go. Then we have 6 years of corporate overheads around $500 million. So subtracting these 2 items from the net cash backlog effectively gives available free cash of $2.8 billion for the period or $470 million on average per year. From this, our existing cash return is now more than $1.7 billion for the period, more than 50% of our current market cap, where, by the way, we've returned around $1.5 billion over the last 6 years. This then leaves $1.1 billion for incremental returns and to fund any future growth requirements, which, as we've previously communicated, we'd 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 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. Finally, to update you on our guidance for 2025. 2025 directional revenue guidance is above $4.9 billion, of which above $2.2 billion is expected from the lease and operate segment and around $2.7 billion from the Turnkey segment. 2025 directional EBITDA guidance is around $1.55 billion. That's it from me. Now back to Oyvind.
Oivind Tangen: Thank you very much, Douglas. Very clear. With our financial stability, we are able to focus our business model on our strategic growth drivers. Through our Ocean Infrastructure platform, we are advancing our core business by focusing on excellence and execution of our existing backlog. By 2030, the key objective is to decarbonize our fleet by reducing emissions by 50% for downstream lease assets compared to 2016 levels as we work towards our 2050 net zero commitment. Through Win & Grow, we aim to expand our backlog. We are also developing new solutions and products, including a near zero emission FPSO where our work is nearing completion. This project integrates features from our emissionZERO program, including combined cycle, closed flare, and carbon capture technologies, underscoring our dedication to reducing emissions. Leveraging our unique expertise in deepwater projects, we are pioneering more working towards growing new markets by developing profitable new Ocean Infrastructure solutions. We are confident in our ability to develop new solutions based on 65 years of innovative progress and industry first in Ocean Infrastructure. We delivered the first CALM Buoy in 1959. And even as our terminals and services business thrived, we continued to innovate and we designed new floating solutions and increased production capacity and moved into deeper waters. 57 years after the first terminal, FPSO Turritella became the deepest moored unit at nearly 3 kilometers. Since then, we have piloted our solution for floating offshore wind at commercial scale, developed digital agents and digital platform service to leverage the immense data from our global operations. We've materialized the Fast4Ward programs competitive advantage and delivered massive FPSOs of incredible complexity such that the world has never seen. We are pioneers through and through, driving progress by building on our rich heritage and deep understanding of the market and its challenges, strategically positioning the company through the energy transition and beyond for long-term success within the blue economy. We are enhancing our positioning in floating offshore wind and larger scale projects through the joint venture Ekwil, signed with Technip Energies, and we are exploring new solutions with purposeful investments and partnerships to explore new Ocean Infrastructure solutions in promising and profitable markets. These include ammonia transfer terminals, a blue ammonia FPSO that is designed to unlock a new revenue stream for our clients by valorizing the associated gas while meeting the growing demand for low-carbon ammonia. We have worked with the technology providers such as Casale and others to conduct design and integration studies on this front. We have also progressed on power barge solutions, CO2 injection and terminals contemplating -- complementing the opportunities already under development. To conclude, our strategy pace. In 2024, we secured 3 awards, confirming industry confidence in our capability and further growing our backlog. This proactive approach ensures we are ready to seize new opportunities and protect our future cash flows. We have a robust financial foundation based on our backlog of committed contracts from premium clients, which is expected to generate $9.5 billion net cash over the next 25 years around 40% to come before the end of this decade, and that's excluding the clear growth potential. In 2025, we have 3 significant start-ups in the pipeline. This increase in production capacity not only boosts our financials, but also de-risks our portfolio. We are committed to delivering value to our shareholders with a circa $155 million dividend combined with a $150 million share buyback for 2024 and a pay-out of $1.7 billion until 2030 with significant upside potential from future growth. The near-term market outlook is strong, offering significant growth potential for our backlog and returns. Our proven fast forward offering differentiates us in the market, positioning us well to secure high potential complex project. In 2024, we added 2 new clients in 2 new countries, demonstrating our ability to expand into new markets. Looking further into the future, our track record and expertise in Ocean Infrastructure positions us to pioneer solutions that leverage our unique recognized capabilities. This, plus our ability to partner with other progressive companies means we are confident in our capacity to decarbonize and diversify our product offering and transition our business within the blue economy to deliver on our promise of True. Blue. Transition. We invite you to stay engaged with us on our journey. Thank you for listening, and we would now like to open up the floor for questions.
Operator: [Operator] Thank you. Ladies and gentlemen, we will start the question and answer session now. [Operator Instruction] Our first question comes from the line of Quirijn Mulder. Please go ahead.
Quirijn Mulder: Good morning, everyone. I hope you can hear me.
Oivind Tangen: Fairly. If you speak up a little bit, it's very low.
Quirijn Mulder: Yes, I understand. I am picking it up somewhat better. My first question is about the order intake. Can you give me an idea about this EUR 11 billion order intake in 2024 to some sort of split? And my second question is with regard to the TotalEnergies. I read the text as that there's a Turnkey and to be delivered to TotalEnergies when finished. Is there anything like a sale operator? That were my questions.
Oivind Tangen: Okay. So additions to the backlog, I think as we explained through the narrative, essentially Jaguar FID, TotalEnergies sold the GrandMorgu FPSO and the lease and operate FSO Trion for Woodside. When it comes to the GrandMorgu, so it's a sale. That's correct. And we're currently in the process discussing the operating model and potential contract to run that.
Quirijn Mulder: Okay. So -- but you cannot give me a feeling on the split between the 3 names for this...
Oivind Tangen: For the breakdown of this -- no, no, we don't go into the specific economics of any of the awards, no.
Quirijn Mulder: Okay. Thank you.
Operator: [Operator] We will now take our next question. Please stand by. Our next question comes from the line of Thijs Berkelder. Please go ahead. Your line is open.
Thijs Berkelder: It's Thijs Berkelder, ABN AMRO, ODDO BHF. First question is on your outlook for 2025. Can you maybe give a bit more insight into what you expect for EBITDA lease and operate versus Turnkey? And what is included there? Does it include, let's say, finalization payments for Almirante Tamandaré and Alexandre de Gusmão?
Douglas Wood: Yes. So, good morning Thijs. So, yes, as ever, we give the consolidated outlook for EBITDA. So as I mentioned, it's $1.55 billion. We don't give a breakdown between the segments. However, what you can think about is particularly I mentioned the fact that GrandMorgu and Jaguar didn't really contribute in 2024 because we were just getting close to the 25%. They will be over that in 2025. So there's quite a material contribution from those and less of an impact from the awards, which we've substantively now finalized and are awaiting hook-up and commissioning this year.
Thijs Berkelder: Okay. Then maybe for, let's say, listening investors, shareholders, maybe again shortly explain the tax-free dividend system in the Netherlands. What keeps you restricted from further lifting the dividend?
Douglas Wood: Yes. So what you do is you take the dividends over the last 7 years and then you take away the highest and lowest, so that then leaves you 5 numbers. You divide that the aggregate of those by 5, that gives you an average. That is a EUR 150 million and then what I said is that the $155 million that's based on the EUR 150, that's going to be a floor, if you like. So there could be some upside based on the current euro-dollar exchange rate, but EUR 155 is going to be the base number we use.
Thijs Berkelder: And that means that the longer you are paying dividends, the higher the tax-free dividends can become?
Douglas Wood: Yes. I mean you can kind of effectively already do the math for the next year. So that averaging formula would mean that the base dividend amount have to go up a bit in coming years.
Thijs Berkelder: Yes. Thanks.
Operator: Thank you. We will now take our next question. Please stand by. Our next question comes from the line of Daniel Thompson. Please go ahead.
Daniel Thomson: Hi, good morning and congrats on a good set of result. Just 2 questions, please. I mean, given the shift we have in the mix of commercial models, I was wondering if you could just give us some sort of indication on the bridge from EBITDA to cash flow items. So just if you could comment on maybe CapEx expectations and working capital expectations in 2025 as we kind of -- as less of the build cost go through the CapEx line and how it might impact working capital. And then the second one is just on the 16 sweet spot sort of opportunities you've highlighted. Can you give us any sense of weighting by year? I mean you've got one -- you've ordered an additional MPF hull so maybe that suggest you have a good idea of where the first one is going. But yes, is this back-end weighted, kind of equally weighted or front-end weighted?
Oivind Tangen: Yes. Let me talk to the prospects a little bit. So as you all know, a deepwater development is something that comes to the market on the back of very significant exploration work. So we have quite good visibility of those that are in the '25, '26 space, and you will find them on Petrobras pages for what's in Brazil. You will see with Total for what is emerging in Namibia and Exxon and partners are quite explicit on the development pace in Guyana. And when we look at prospects in the '25, '26 space, they are quite discrete opportunities that we're pursuing in those 3 markets as a key market. Then there are '27 and beyond, we obviously have close dialogue with most of the IOCs and we are monitoring that. But for the prospects of additional our MPF hulls is also to keep the pace and the partnerships with IRS going. So we find that there's a good match between the commitment to 2 and the discrete prospect we see in the '25, '26 space.
Douglas Wood: Then on the sort of the EBITDA, the cash flow elements. So we still, as I mentioned, have some of the investment to make in the projects that we're finalizing. So that was the $250 million I mentioned, most of which we would expect to roll off through this year, but there could be some that moves a bit into the next year. Then with the sale and operate projects, overall, those are cash neutral or positive on average. But sometimes you can actually get like temporary swings depending on timing of invoicing milestone payments. So that can create a bit of volatility. Then the other element, obviously, we have is we're growing the fleet. We've got 3 FPSOs joining this year. So as expected as we take into account that soon requires a bit of working capital.
Operator: Our next question comes from the line of Mick Pickup.
Michael Brennan: A couple of questions, if I may. Obviously, very active FPSO market. Can you just talk about yard availability? Are we seeing any pressures on that for projects going forward? And then second question, and excuse me if I'm just being ignorant, my math is not good enough, but the bit that surprised me was your Turnkey revenues for 2025 being a lot higher than I had expected given where last year's half year number was, projects coming in, things going forward. Is there something about early recognition of revenues on the MPF hulls? I know you're not booking profits, but do we get an early recognition of revenues because you transfer the hull over?
Oivind Tangen: Yes, Mick. Thank you for your question. So when it comes to yard availability there is a high pace of building activities, both from the offshore sector and utility sector. So that's something we're monitoring constantly. Typically, from a yard constraint, the bottleneck goes through the dry docks, and that means that goes through the hull, which is also why we continue to invest and believe in the MPF solution as the key competitive advantage and also to deliver on schedule certainty. So when it comes to topside modules and integration capabilities, that's an easier equation, and we find that that's not so much of a capacity constraint. It's more as an economic factor to consider in terms of finding the best cost base. So yard availability, it is a factor and MPF is the mitigator. Douglas?
Douglas Wood: Mick, so the revenue really again -- it's really all about Jaguar and B 58 we're ramping up last year. Now we're getting into really the thick of the construction. So those are really the big drivers of the revenue. That's the story there.
Operator: Our next question comes from the line of Thijs Berkelder.
Thijs Berkelder: Yes. Follow-up question. On your Slide 13, you show an overview of your uses of cash. The combination of available free cash is EUR 2.8 billion is slightly lower than 6 months ago. Can you explain why it's lower? And the growth potential part looks like something like EUR 1.5 billion. Can you explain why you want to use the growth part for?
Douglas Wood: Okay. So first up on that growth part, don't get your pixel measures out. That is purely kind of notional. We are -- I thought we'd achieve that with the heavy shading, but it's just to give an indication there's upside, but it's not proportionate to the -- just for the record. So obviously, what drives the available free cash is the overheads, the net equity investment, they've -- we've been fairly consistent around that. But the -- at least up until 2030, which is the period that we're measuring. Clearly we've had a lot of materialization of the net cash backlog, especially following the purchases of Destiny and Prosperity last year. Plus I think the previous version of this chart actually was 6.5 years. So that's -- those are the elements here, but still a very strong net cash backlog. We've increased the returns. Clearly, there's the -- there's upside there. The current return level is 60% of that 2.8, which I think is pretty reasonable. Then again, yes, it's not proportionate, but as new awards likely follow sale and operate, that give us a good chance to add some extra cash during the window that we've zoomed in on this slide.
Thijs Berkelder: Yes. And the slide also shows right $470 million available free cash on average per year.
Douglas Wood: Yes.
Thijs Berkelder: You return or you plan to return this year something like $280 million or so? At what moment in time can we expect then you to reach the $470?
Douglas Wood: So one thing to bear in mind this year, as I mentioned, is the additional net equity investment we have to go that's on this chart there. So that's sort of an impact in the thinking. We want to be able to deliver growing stable returns. So as time progresses, we win new awards, we're confident that we'll be able to unlock the $1.1 billion and beyond. But it always pays, of course, to have a bit of reserve in the tank in terms of prudently managing the finances of the company.
Operator: [Operator Instructions] There are no further questions. Mr. Tangen, please go ahead.
Oivind Tangen: Thank you very much. I really appreciate your interest in the company and following our journey. So I look forward to our next update. And in the meantime, stay tuned. Thank you. Have a nice day.