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UPDATE 2-SBM Offshore CEO steps down as losses mount
August 18, 2011 / 6:01 AM / 6 years ago

UPDATE 2-SBM Offshore CEO steps down as losses mount

* Chief operating officer lined up as replacement

* H1 turnover up 6 pct to $1.46 bln vs poll $1.45 bln

* H1 EBIT loss $214 mln vs poll $224 mln loss

* SBM shares largest gainers in Amsterdam’s blue-chip index (Adds analyst comment, more detail, background, shares)

By Greg Roumeliotis

AMSTERDAM, Aug 18 (Reuters) - Dutch-listed maritime oil and gas engineer SBM Offshore said its chief executive would stand down at the end of the year as it posted a first-half operating loss on charges from disputed projects.

Shares in the world’s largest supplier of floating production, storage and offloading platforms have lost more than a quarter of their value since July 28, when it said it would swing to a first-half loss due to a $450 million impairment.

SBM, which focuses on deepwater contracts in Brazil, Africa, Asia, the Gulf of Mexico and the North Sea for energy majors such as BP and Petrobras , said on Thursday no decision had been taken on its 2011 dividend.

The company said that CEO Tony Mace would not stand for re-election “in light of recent events” and that chief operating officer Bruno Chabas, who has been in the job since May, would be nominated to succeed him come January 2012.

“The impairment charge is very disappointing in light of the excellent performance on the more recent projects, which is reflected in the positive momentum on key indicators,” Mace said in a statement.

The charge resulted from a row with two clients, Canada’s Encana , which is working on the Deep Panuke gas project off the coast of Nova Scotia, and Talisman Energy , which is developing the Yme oilfield offshore Norway.

SBM has said the provision was needed because of litigation involving Encana and arbitration in the case of Talisman, adding it would continue both actions against the clients to maximise recovery of costs for the platforms it built for the two firms.

“In our view it is clearly positive that Tony Mace will step down after substantial cost overruns in 2008, 2009, 2010 and 2011,” Rabo Securities analysts wrote in a note, upgrading their rating to “buy” from “hold” with a 20 euro price target.

SBM shares were up 2.8 percent to 14.34 euros at 0735 GMT, the largest gainers in Amsterdam’s blue-chip index .

INSIDER TO OUTSIDER

In nominating Chabas to succeed Mace, the supervisory board has opted to replace a company insider who has spent more than three decades building his career at SBM with an experienced executive who only joined the company this year.

Frenchman Chabas worked for 18 years for Acergy, now merged with offshore oilfield engineer Subsea 7 , where he was chief operating officer for eight years and chief financial officer for three years.

Mace joined SBM in 1977 as an engineer and worked his way up to several management positions before he became CEO in 2008.

SBM Offshore reported a first-half loss before interest and tax of $214 million on turnover up 6 percent to $1.46 billion. Analysts in a Reuters poll had expected a loss of $224 million on turnover of almost $1.45 billion.

SBM, which competes with Japan’s Modec and Norway’s BW Offshore , said it expected a 2011 net result around breakeven before the deduction of minority interests, seen at around $30 million in 2011.

The company said its order portfolio had reached a record $12.4 billion, up from $10.9 billion a year ago. (Editing by David Cowell and David Hulmes)

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