Summary
TechnipFMC plc's (FTI) 2018 10-K filing highlights a challenging year marked by a significant net loss of $1.92 billion, primarily driven by substantial impairment charges totaling $1.78 billion related to goodwill and vessels, alongside a $280 million legal provision. This financial performance reflects ongoing industry pressures, including the impact of lower oil prices on customer capital spending, which led to a 16.6% decrease in revenue compared to 2017. Despite the net loss, the company is strategically positioned to benefit from anticipated improvements in the subsea market, driven by increasing final investment decisions and the adoption of integrated subsea project delivery models. The Onshore/Offshore segment shows resilience, particularly in LNG projects, and the Surface Technologies segment experienced revenue growth due to a North American market recovery. The company is focused on cost reduction, operational efficiency, and technological innovation, including the further development and commercialization of its Subsea 2.0™ product platform, to navigate the current market and capitalize on future opportunities. Management has identified material weaknesses in internal control over financial reporting, specifically in period-end financial reporting and accounting for income taxes, and is implementing remediation measures.
Financial Highlights
55 data points| Revenue | $12.55B |
| R&D Expenses | $189.20M |
| SG&A Expenses | $1.14B |
| Operating Expenses | $13.47B |
| Operating Income | -$532.70M |
| Interest Expense | $482.30M |
| Net Income | -$1.92B |
| EPS (Basic) | $-4.20 |
| EPS (Diluted) | $-4.20 |
| Shares Outstanding (Basic) | 458.00M |
| Shares Outstanding (Diluted) | 458.00M |
Key Highlights
- 1Significant Net Loss: TechnipFMC reported a net loss of $1.92 billion for the year ended December 31, 2018, largely attributable to $1.78 billion in asset impairments (goodwill and vessels) and a $280 million legal provision.
- 2Revenue Decline: Total revenue decreased by 16.6% to $12.55 billion in 2018 compared to $15.06 billion in 2017, primarily due to reduced project activity across segments and the completion of major projects like Yamal LNG.
- 3Subsea Segment Challenges: The Subsea segment experienced a significant operating loss of $1.53 billion, negatively impacted by asset impairments and lower inbound orders reflecting the prior period's market downturn.
- 4Onshore/Offshore Resilience: This segment demonstrated strong operating profit of $824 million, up 2% year-over-year, driven by effective project execution on large projects like Yamal LNG and opportunities in LNG and petrochemicals.
- 5Surface Technologies Growth: The Surface Technologies segment saw a revenue increase of 25% to $1.59 billion and a significant improvement in operating profit margin to 10.9%, driven by North American market recovery and new product introductions.
- 6Strengthened Order Backlog: Total order backlog increased by 12% to $14.56 billion at the end of 2018, with a substantial increase in the Onshore/Offshore segment's backlog indicating future revenue potential.
- 7Material Weaknesses in Internal Controls: Management identified material weaknesses in internal control over financial reporting related to period-end financial reporting and accounting for income taxes, though some previously identified weaknesses were remediated.