2008 Annual Report - SBM Offshore

SBM Offshore Annual Report 2008 / Overview3Message from the CEOLooking back, 2008 has been a year with both positivesand negatives. We have seen record turnover and ourorder backlog reached a new high. The lease fleet and ourservices business continued to provide excellent results,however, our net profit was disappointing as two of our majorFPSO projects incurred cost and schedule overruns duringtheir finalisation phase. These projects faced problemsessentially caused by an overheating market for equipmentand construction services which diverged significantly fromthe market conditions assumed in the bid proposal and wasincompatible with contractual requirements. Much focushas been placed on understanding the underlying problemsand implementing enhanced procedures and controls toensure that project execution performance returns to thelevel that the Company has traditionally achieved.gas reserves to meet world energy requirements. We aredeveloping further innovative technology to meet thesefuture needs. We continue to aim for steady growth,sustaining our market leader position as a service providerand reliable partner for our clients.We are convinced that the Company has a robust businessmodel, as has been demonstrated by past performance,providing attractive returns to you our shareholder. Wethank our employees for their efforts. Their dedication isessential to the further development of SBM Offshore.Tony MaceIn 2008, we were engaged with the execution of elevenmajor projects of which three were delivered during thecourse of the year. The increase in our business over thelast years, with the associated build-up of our executioncapability, has established SBM Offshore as one of themajor contractors in the offshore oil and gas sector.The strong order book puts us in a relatively secure positiongoing forward, with several important project deliveriesplanned in 2009 and 2010. The recent oil price collapseand the subsequent expected slow down in the award ofnew contracts, makes it however difficult at this time toprovide a full year profit expectation for 2009.We expect that the demand for our products and serviceswill remain strong in the medium to long term due to thenecessary increasing development of deepwater oil andFPSO Frade departure from Dubai