SLB Surges in Profit by 14% in Q1 2024 Results

SLB Surges in Profit by 14% in Q1 2024 Results

SLB has announced its first quarter results, achieving year-on-year 14% rise in profits, driven by higher oil and gas drillings in the Middle East and Asia which had offset decline in North America.

“Internationally, we harnessed broad-based activity growth, with 21 of our 25 international GeoUnits increasing revenue year on year. Even when excluding the Aker contribution, our international revenue grew by double digits. These impressive results were led by the Middle East and Asia, which exhibited remarkable growth of 29% compared to the same period a year ago,” said Olivier Le Peuch, CEO of SLB during the conference call.

SLB has recorded first-quarter revenue of $8.7 billion, with a year-on-year increase of more than 10% when excluding the impact of the Aker subsea acquisition, stated Stephane Biguet, Executive VP and CFO of SLB.

International revenue surged by 18% year-on-year, predominantly driven by a 29% growth in the Middle East. However, North America revenue saw a 6% decline, primarily due to lower rig counts in US land and the impact of reduced gas pricing affecting projects in Canada.

“Specifically in the Middle East and North Africa, year-on-year growth was supported by continued investments on long-cycle developments and capacity expansion projects, in both oil and gas, across Algeria, Egypt, Iraq, Libya, Qatar, Saudi Arabia, and the United Arab Emirates. In Asia, we saw strong activity across the region led by offshore, notably in China, Indonesia, Malaysia, the Philippines, and India,” Le Peuch explained.

SLB has achieved a companywide adjusted EBITDA of $2.06 billion, a 15% year on year, aligning with the guidance for mid-teen adjusted EBITDA growth for the full year of 2024.

Additionally, SLB generated $327 million in cash flow from operations during the quarter. Free cash flow was negative at $222 million, showing a slightly better turnover from the same period last year.

“These cash flow collections following very strong receivable performance in the fourth quarter of last year;” said Biguet.

For the company’s outlook, Le Peuch forecasts that International revenue is expected to grow at a mid-single digit percentage rate in the second quarter from the first, while North America revenue could rise at a low-single digit rate.

Shares of SLB, formerly known as Schlumberger, were down 1.9% at $49.97 in morning trade.

SLB said it aims to return $7 billion to shareholders over the next two years, in part due to its nearly $8 billion acquisition of rival ChampionX.

“Our acquisition of ChampionX will further evolve our portfolio to capture this opportunity with the addition of a leading production chemicals business and well established artificial lift portfolio, with significant benefits to our customers in every producing basin in the world,” said Le Peuch.

“This will be particularly visible in the offshore environment, which requires a higher intensity of production chemicals for flow assurance, reinforcing the long-cycle value of our offshore strategy,” he added.

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