SLB beats estimates in second-quarter performance on 'significant' international growth - Upstream Online
SLB beats estimates in second-quarter performance on ‘significant’ international growth | Upstream Online
Oilfield services giant SLB saw profits increase further in the second quarter of the year beating analyst estimates, as strength in drilling activity in international markets lifted revenues.
In its second-quarter financial results released on Friday, SLB (formerly Schlumberger) posted an 8% year on year increase in net income attributable to the company of $1.03 billion.
Chief executive Olivier Le Peuch said the performance reflected “significant growth in the international markets, particularly in the Middle East & Asia, and offshore”.
“Compared to the same period a year ago, international revenue grew 21%, outpacing North America which increased 14%,” he said.
The North America business grew against the previous quarter despite an overall decline in the rig count, said the chief executive.
SLB’s overall revenue stood at $8.10 billion for the quarter, marking a 20% increase year on year.
Adjusted EBITDA also rose 8% against the same time last year to $1.96 billion.
Cashflow from operations stood at $1.61 billion, and free cash flow at $986 million.
“The upcycle continues to unfold,” commented Le Peuch, noting that bullish market conditions for the sector are expected to continue. “We continue to see positive upstream investment momentum in the international and offshore markets.”
The two segments singled out by Le Peuch, international and offshore, now account for almost 80% of the company’s global revenue stream.
Le Peuch noted how the group signed a number of multi-year contracts in the past quarter, suggesting this would allow the business to perform with resilience against future price volatility or bearish market conditions.
Likewise, the developments in offshore markets were seen by the company as bringing a steady operation flow for the group.
“These markets are being driven by resilient long-cycle offshore developments, production capacity expansions, the return of global exploration and appraisal, and the recognition of gas as a critical fuel source for energy security,” said Le Peuch.
In the fast-growing Middle East and Asia regions, SLB saw “double-digit” growth from its operations in a number of key markets including Saudi Arabia, the United Arab Emirates, Kuwait, China, India and Egypt.
In the offshore divisions, the company progressed in businesses including the US Gulf of Mexico, Brazil, Angola, Namibia and the Caspian Sea.
The company expects the momentum in international markets, outside North America, to continue to build in the second half of the year, while the North America region slows down. Similar comments were made earlier this week by one of the other oilfield services main players, Baker Hughes.
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