10-QPeriod: Q1 FY2022

TechnipFMC plc Quarterly Report for Q1 Ended Mar 31, 2022

Filed May 2, 2022For Securities:FTI

Summary

TechnipFMC plc (FTI) reported a net loss of $61.7 million for the first quarter of 2022, a significant shift from the $368.2 million net income in the prior year's quarter. This loss was primarily driven by a $28.5 million loss from its investment in Technip Energies, compared to a substantial gain in the prior year, and also impacted by operational shifts. Despite the net loss, the company's outlook remains positive, anticipating a multi-year upcycle in energy demand and strong inbound orders through at least 2025. The Subsea segment saw strong inbound orders of $1.9 billion, the highest quarterly level since 2019, and an increase in its order backlog. The Surface Technologies segment also experienced revenue growth, driven by increased activity in North America and strategic initiatives like the E-Mission solution. The company is also making strides in the energy transition, focusing on greenhouse gas removal, offshore floating renewables, and hydrogen. While the reported quarter showed a loss, the underlying operational performance and the company's strategic positioning for future growth, particularly in offshore energy and renewables, suggest a potentially positive trajectory. Investors should monitor the impact of the Technip Energies divestment and ongoing energy market dynamics.

Financial Highlights

48 data points
Beta

Revenue

$1.56B

Net Income

-$61.70M

-4.0% Net Margin

EPS (Diluted)

$-0.13

Total Assets

$10.08B

Cash & Equivalents

$1.20B

Free Cash Flow

-$356.70M

Financial Statements
Beta
Revenue$1.56B
R&D Expenses$14.60M
SG&A Expenses$159.60M
Operating Expenses$1.55B
Operating Income$57.70M
Interest Expense$37.90M
Net Income-$61.70M
EPS (Basic)$-0.13
EPS (Diluted)$-0.13
Shares Outstanding (Basic)451.10M
Shares Outstanding (Diluted)451.10M

Key Highlights

  • 1Net loss of $61.7 million for Q1 2022, compared to a net income of $368.2 million in Q1 2021, significantly impacted by the accounting treatment of the Technip Energies investment.
  • 2Total revenue decreased by 4.7% to $1,555.8 million from $1,632.0 million, with a decrease in Subsea revenue offset by growth in Surface Technologies.
  • 3Subsea segment inbound orders reached $1.9 billion, the highest quarterly level since 2019, and the total order backlog grew to $8.9 billion.
  • 4Positive outlook for a multi-year energy demand upcycle, with expectations of strong inbound orders through at least 2025.
  • 5The company is actively engaged in the energy transition, with progress in offshore floating renewables (e.g., ScotWind project) and initiatives for greenhouse gas removal and hydrogen.
  • 6Operating cash flow from continuing operations was negative at $(329.4) million, a decrease from positive $181.5 million in the prior year's quarter, mainly due to timing differences in project milestones and payments.
  • 7The company is progressing with its debt management, announcing a tender offer for its 6.50% Senior Notes due 2026 shortly after the quarter-end.

Frequently Asked Questions

The net loss in Q1 2022 was largely due to a $28.5 million loss recognized from the investment in Technip Energies, which included fair value revaluation losses. In contrast, Q1 2021 included a significant gain of $470.1 million from the same investment. While operational revenue saw a slight decline, the change in the valuation of the Technip Energies stake was the primary driver for the shift from profit to loss on a net basis.

The outlook is positive, driven by an anticipated multi-year upcycle in energy demand. The Subsea segment is expected to see strong inbound orders, with Q1 2022 orders being the highest since 2019, and a growing order backlog. The Surface Technologies segment also saw revenue growth, supported by increased activity in North America and new product offerings, and is poised for continued international market strength.

TechnipFMC is committed to the energy transition and is focusing on three main pillars: greenhouse gas removal, offshore floating renewables, and hydrogen. The company is making progress in offshore renewables through partnerships like Magnora Offshore Wind for the ScotWind project and is collaborating with major players like Shell to explore synergies in reducing CO2 emissions and enabling offshore renewable energy generation.

Operating cash flow from continuing operations was negative in Q1 2022, primarily due to timing differences in project milestones and payments. However, the company's overall liquidity is considered strong, with sufficient cash and access to its revolving credit facility. Management is committed to maintaining a strong balance sheet and ample liquidity to meet its requirements and plans over the next 12 months.