Ladies and gentlemen, thank you for holding, and welcome to the SBM Offshore Half Year 2022 Earnings. At this point, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Just to remind you, this conference is being recorded. I would like to hand over the conference to Mr. Bruno Chabas. Please go ahead.
Thank you very much, operator, and welcome to SBM Offshore Half Year 2022 Earnings Update Call. My name is Bruno Chabas, CEO of SBM Offshore, and I'm joined today by my management board, Øivind Tangen, Chief Operating Officer, Douglas Wood, CFO, and for the last time, Xiang Song, Philippe Barril, CTO. As announced, following Philippe's departure at the end of August, the structure of the management board would be simplified. The current CTO portfolio being distributed between the management board members. Let me now present SBM Offshore results. Our main achievement for the first half of 2022, and go through the strategic updates of the company. After which, Douglas would go through our financials. As always, we welcome your questions after the prepared section of this call. Please note the disclaimer, and now we go to the core of the presentation.
SBM Offshore is in the energy transition business. The world needs oil and gas going forward, produced in the most responsible way. Deepwater offers one of the most carbon and cost-efficient sources of oil and gas. As such, SBM Offshore can make the most significant positive impact in creating carbon-efficient technology for new FPSO, while improving our operation with the aim at reducing greenhouse gas emission from our existing fleet. For the medium term, SBM Offshore develops competitive renewable solutions. We create value through three platforms, through our ocean infrastructure with 15 assets in our fleet and five FPSO under constructions. These new FPSO decrease our CO2 intensity and generate a record-breaking backlog with a net cash flow visibility up to 2050.
Supporting the energy transition through the development of zero-emission FPSO to help our clients in their commitment to reduce their emission and to remain leaders in our market by capitalizing on our Fast4Ward experience. On new energy, we're developing competitive renewable energy, particularly gaining footholds in the promising floating offshore wind market by transferring oil and gas skills, experience, and technology capabilities in this market. SBM strategy and action plan are underpinned by our environmental, social, and governance framework. Using our stakeholder material and key topics, we define our ESG framework and our strategic priorities. As such, it is only natural to embed ESG at the core of our strategy, our strategic action plan. That way, all SBM employees and management have ESG integrated in their objective, which also drives short-term and long-term incentives. Let's now turn to the highlights for the first half of the year.
We saw steady growth with the award of FPSO One Guyana, which brings our backlog to another record level, now above $31 billion. The focus of the company is to deliver this backlog in line with our historical track record and reliable execution and operation. We're on track with a good set of financial results over the first half. Some major milestones were also achieved. The successful decommissioning and ramp up production of FPSO Liza Destiny in an industry-leading time, and the closing of FPSO One Guyana financing. Today's situation underlines the world energy needs, requiring at the same time sustainable, reliable, and affordable sources of energy. SBM Offshore assists its clients in doing so by producing reliably from the most carbon efficient and hence sustainable energy sources. Market outlook remains very positive, both in FPSO business and floating offshore wind markets.
As such, we order a new MPF hull, and we will continue to target projects delivering value to all stakeholders while remaining disciplined around the selection of projects we target. Finally, as announced in 2021, the company commits to a strategy to bring the company to a net zero by 2050. We're now setting intermediate goals with ambitious, yet realistic emission reduction targets by 2030. In order to create a realistic pathway toward net zero in 2050. I will say a bit more about this new target in a minute. First, let's now start with our first value platform or ocean infrastructure. In line with our vision, SBM Offshore delivers safe, sustainable, and affordable energy. Safety remains the company's priority.
Total recordable injury frequency rate year to date was 0.10, compared with the full year 2022 target of below 0.15. On affordability, SBM Offshore FPSO for large and complex developments our target market have a very attractive break-even prices of between $25-$35 per barrel. On sustainability, our generation three units and the latest Fast4Ward units have a greenhouse emission intensity, which is around 40% lower than the industry average. On reliability, SBM Offshore's fleet has a historical uptime of 99%. Our turnkey delivery track record is unique, demonstrating the reliability of our operations and the significant energy production associated with our FPSO. The fact that our nameplate capacity will be close to 3 million barrels per day when our current backlog is delivered, demonstrate how important our reliability is.
Following on reliability in FPSO construction, this graph shows three things. Over the last five years, only two complex FPSO with an oil production capacity over more than 120,000 barrel per day were delivered on time. Both of these were done by SBM Offshore. Reliability is not a given. It requires discipline, experience, including in execution, combined with strong project management and focus. The industry average delay in execution for delivering FPSO was under two years, with some units experiencing more significant delays. These delays has a massive impact on clients' economics, close to $1 billion in an NPV with, in NPV at $50 per barrel and double that at today's price. Finally, the graph shows the value of that SBM Offshore brings to its clients, especially with the BOT and lease and operate model based on own and optimized FPSO design.
Now let's have a look at the progress of our FPSO project under construction. Again, to put SBM Offshore's contribution in perspective, the fleet will have a total production capacity of close to 3 million barrels of oil per day when our current projects under construction are finalized with a total additional production capacity exceeding 1 million barrels a day. Now on the execution performance. It is still a challenging environment. We witnessed more lockdown situation in China during the first half of the year. While the COVID situation around the world is improving, it's still present. Our commercial model and specific mitigation measure allow cost control and schedule protection. We're not 100% immune against those challenges. Part of the portfolio remains sensitive to further inflationary pressure.
Overall, the portfolio is looking good progress with a robust profitability thanks to the outstanding work done by our teams. Now on the fleet. The number of operating units in the fleet stand at 15, with a total production capacity of around 1.8 million barrels of oil per day. The fleet downtime performance for the first half of the year was impacted by FPSO Cidade de Anchieta shutdown, for which repairs are progressing towards safe restart in the second half of the year. Over the first half of 2022, FPSO Liza Unity was added to the fleet. Liza Destiny's updated flash gas compressor was successfully installed and is performing as planned. In addition, following optimization work, the unit production capacity increased.
The production for those two FPSOs, Liza Destiny, Liza Unity, has exceeded their initial combined capacity of 340,000 barrels of oil per day. Through its full lifecycle offering, SBM Offshore is also in charge of unit decommissioning and recycling. The fact that ESG is embedded in all we do is demonstrated by the Deep Panuke MOPU responsible recycling for which we are using the highest recycling standard in-country activities, reducing environmental footprint, while including initiatives contributing to life below water plus generating business locally. The next unit entering in the decommissioning phase is FPSO Capixaba, for which we will apply our responsible recycling policy, which adheres to the most responsible environmental and social standard. Bearing these results in mind, SBM Offshore operates in the energy transition business. The market outlook in our traditional FPSO business is very positive, with 33 potential awards until 2025.
This outlook improved compared to the previous years as the world's oil demand has significantly recovered, while the supply side is witnessing the effect from under-investment during the past decades. In the market for complex FPSOs with low carbon intensity and low breakeven prices remain the most attractive investment opportunity for our clients. Over the next few years, out of the estimated average 9 FPSO awards per year, around 3 are within our target market of large FPSOs. We reiterate our capacity of two-plus FPSO awards per year, or about 6 FPSOs in parallel at various stages of construction. Again, SBM Offshore will remain selective and disciplined in selecting which bid to pursue.
As an energy transition company, SBM Offshore announced in 2021 its ambition to achieve net zero by no later than 2050, including Scope one, Scope two, and Scope three for downstream lease asset, the latter covering the emissions from our FPSO fleet. To create a clear pathway for its 2050 net zero ambition using a science-based approach, SBM Offshore has defined intermediate targets with the following key milestone. Reducing greenhouse gas intensity in Scope three downstream assets by 50% by 2050, and this is starting from 2016 as a base year. Reach net zero emission in Scope one and two by no later than 2025. Achieve zero routine flaring by 2030. Offer the market emissionZERO , leading to a near zero FPSO at latest by 2025.
One of the pillars of our transition strategy is our emissionZERO program, through which we intend to be able to offer a near-zero CO2 emission FPSO. We have seen good progress on the program with in-house technology development, qualified suppliers and technology partners. An example is combined cycle power generation, which brings lower carbon emission compared to the conventional power generation. Another strong technology contributor would be the carbon capture feasible in the medium term. Digitalization is already playing a big role in current track record of emission reduction and will continue to bring significant contribution to the reduction targets. The company is on track to making emissionZERO's FPSO solution available to the market by 2025. Here, I would like to highlight some of SBM Offshore core strengths fitting our energy transition ambition.
SBM Offshore is a technology company, but one that has the capability to deliver and deploy solutions with a high technology content at scale. Already for more than 50 years, SBM Offshore has pushed the technology frontier in the offshore energy business. The company, with all its unique engineering, construction, project management and financing experience and innovative capacity, will continue to position itself in developing market niches we consider attractive from a risk and reward standpoint. SBM Offshore is monitoring various market dynamics in order to bring technological solutions when appropriate and timely. Hydrogen and ammonia technology or other energy carriers are just one of those examples. In today's world, with a global push to sustainability, SBM Offshore stands to benefit from market dynamics as any future product will require technological developments which are safe, sustainable and affordable.
As just mentioned, innovation and continuous improvement is the DNA of the company, and we apply those principles to develop competitive, renewable energy solutions. The floating offshore wind market continues to develop worldwide, and the current market outlook of capacity to be sanctioned remains high, with expected between 6-16 gigawatts to be installed by 2030. Within this market, the company has the ambition to become a top three floating technology provider. A co-developer or participating in the floating offshore wind technology provider in 2 gigawatts of projects over the next decade. Also, in the renewable market, the company will remain selective and disciplined, targeting only projects that are adding value to all stakeholders and strike the right risk and reward balance. The construction of the Provence Grand Large project, first pilot project, is progressing with commissioning schedule in 2023.
The construction installation of those 3 8.4 MW floaters will account for about 10% of the total installed floating wind electricity generation capacity by 2023. This is the first floating offshore wind project under construction in France and will be the first project worldwide to be installed using tension leg platform mooring technology, which has the minimum motion and seabed footprint. Lessons learned continue to be integrated into the company's next generation design for floating wind electricity generation. We call this Float4Wind, which leverage our offshore and construction experience. The second generation floater, which is designed for a commercial wind farm, has roughly the same weight compared to our first generation, but is around 50% cheaper due to the simplification that were brought to it.
We have less than 10 parts compared to more than 30 parts in the design of the first generation floater. Time for final component assembly is reduced by circa 70%. In conclusion, we'll try to offer competitive solution, achieving lower costs for better and simpler design, which target mass production with shorter execution time. We expect to continue our investment in pilot projects to ensure that our technology matures in line with market dynamics. Now, I'm leaving the floor to Douglas and over to Douglas on the financials. Douglas?
Thank you, Bruno, and good morning, everybody. The award of the One Guyana project in the first half of the year has resulted in another record backlog of more than $31 billion, speaking to the positive outlook for the market that Bruno just mentioned. The record $1.75 billion financing for this project that we closed last month with 15 institutions participating also shows confidence of our financial stakeholders. As you just heard, we could expect to further grow this backlog through the energy transition given the cost and carbon competitiveness of our FPSO offering and our ability to use our expertise to develop floating solutions for the offshore wind market, plus other alternative energies beyond this. As ever, we will remain disciplined in our choices. Indexation and reimbursable features of our contracts provide protection for our income from the existing fleet.
Our model brings the advantage that we're able to factor in the latest supply chain dynamics and financial market environment at the time when we bid and win new orders. This provides a very resilient and reliable financial foundation, which allows us to navigate the sort of challenges we've seen in the past few years while still being able to fund significant growth, plus, at the same time, offer attractive long-term cash returns to our shareholders. On which note, in May, we paid our previously announced $1 per share dividend, around $180 million in aggregate. At today's prices, this would be about EUR 1 per share with a yield of over 7%. Speaking of the exchange rate, you see the upside from the significantly strengthened dollar in the valuation of the backlog, which I'll cover in a moment.
We've also increased our EBITDA guidance for the year from around $900 million to above $950 million, as we've been able to manage the impact of some of the risks foreseen at the beginning of the year. For example, by confirming an extension to the FPSO Cidade de Anchieta contract by the same duration as the period of shutdown. The associated revenue and margins recognized on a straight line basis over this newly extended lease period. Now, next, to review the key metrics for the first half of the year on a directional basis. Starting with the most important metric to focus on for SBM, our order book or backlog, which is the generator of our substantial long-term net cash flow.
As I just mentioned, the award of the One Guyana FPSO took the backlog to a new record level of more than $31 billion at the first half. From the lease and operate backlog, we expect to receive an aggregate net cash flow of around $9 billion over the next 28 years. Around $9.5 billion, including the BOT purchases, with a third of this $9.5 billion to be received over the next 6 years. If we look at net debt, notwithstanding the continued investment in growth, this decreased slightly to $5.3 billion as a result of strong operating cash flow generation and the partial divestments of FPSO Almirante Tamandaré and Alexandre de Gusmão, which resulted in the derecognition of the partner share of the associated net debt. On the P&L metrics.
Compared with the year ago period, underlying revenue increased by more than 50% to just below $1.8 billion. This increase was mainly driven by the Turnkey segment. We had a ramp-up in activities at the 5 FPSOs under construction, and then the impact of the partial divestment of the 2 FPSOs, allowing us to book the EPC revenue on our partner share in line with percentage of completion to date. Underlying Lease and Operate revenue increased slightly. The key points to note being the impact of the start-up of Liza Unity in the first quarter, mainly offset by the comparative impact from the fact that the last payment from the Deep Panuke contract was received in the first half of 2021.
Just a note for underlying in both revenue and EBITDA, this is reflecting the $75 million cash received in 2021 linked to the redelivery of the Deep Panuke platform, and that was added back to revenue and EBITDA in the first half of last year. Turning to underlying EBITDA, this was flat at around $500 million compared with the year-ago period. Lease and Operate EBITDA was stable, and that was driven by the same offsetting elements as for revenue. For Turnkey, the increase in revenue did not have a commensurate impact on EBITDA, and there are three main factors at play here. First, under construction, the 100% owned Guyana FPSOs under construction during the period will only contribute to EBITDA in the operating phase.
However, note some revenue was recorded for direct payments received from the client during construction as per directional accounting. Secondly, FPSO Alexandre de Gusmão only just reached the required completion percentage to allow margin to be booked. Finally, while mitigation measures against inflationary pressures have been effective in protecting cost and schedule on the overall project portfolio, parts of the portfolio remain sensitive to the pressure in the global supply chain. Now, while we focus on directional accounting because this most closely follows the cash generation, when it comes to turnkey, I have to admit that IFRS does have its advantages in terms of assessing the profitability of the construction portfolio. Turning to the next slide, here we set out the turnkey model and how directional links to IFRS.
Under directional, we take out all the turnkey margin associated with the SBM share of projects under construction, as the cash from this is generated from the backlog during the operating period. As a result, the turnkey gross margin under directional only has the portion of the EPC work of the partner share. In IFRS, we also report the margin associated with this SBM share of our construction projects. Here you can assess the performance of our overall construction portfolio. Factoring this in here, you see a robust gross margin of more than 18% over the first half of 2022, and that's in line with the average of 17% over the past four years. Next to cash flow on a directional basis. Now, the main point to note is that you see quite a large swing in the cash balance over the first half.
You remember that at the end of last year, we drew down about $1.3 billion from two bridge loans for the FPSOs Almirante Tamandaré and Alexandre de Gusmão. We consumed some of that cash through investment in CapEx. Following the partial divestment of these projects, we've deconsolidated the partner share of the remaining debt and cash. In terms of sources of cash over and above operating cash, we had cash in from drawdowns under the Sepetiba and Unity facilities and an increase in working capital related to operating activities. As usual, with significant turnkey activity comes a build-up in working capital.
Just to give you a sense of where we currently stand, of the $900 million net working capital we have in the directional balance sheet at the first half, around $400 million relates to operating activities and the other $500 million relates to SBM investing activity. Looking at liquidity at the end of June, we had $2.2 billion, and in addition to the cash, we had $0.8 billion from the undrawn portion of project debt, and then the RCF was undrawn at the end of the period. Since the end of June, as I mentioned, we've closed the One Guyana financing, and we're progressing the financings for Almirante Tamandaré and Alexandre de Gusmão in line with plan. Next, zooming in on debt a bit further, and there are a few points to highlight around this.
Given our debt is linked to individual contracts in our backlog, it makes sense to monitor this looking at the ratio of the debt to the backlog. You see here that the ratio of debt to backlog was 17% as of June 2022, and that's within the historical range. On the top right, you see the high degree of coverage we have given that the debt will mature a bit more than halfway through the remaining life of the backlog. Our interest rate exposure is pretty much fully hedged. As I mentioned earlier, going forward, our offers to clients will reflect prevailing financial market conditions.
Now our debt goes non-recourse once in the operating phase, and with the release of the guarantee for Liza Unity in the first half, 67% or $3.9 billion of our total $5.8 billion debt was non-recourse in the operating phase. The rest of the debt's related to projects under construction and in turn will become non-recourse once these are brought online. Next to the details of the backlog and the forecast net cash flow going forward. As discussed, the main change from the year-end 2021 was the impact of the One Guyana award. This, plus some other small additions, was more than sufficient to offset turnover during the period. You see the impact of One Guyana as the third orange bar here, representing the contractual purchase by 2027.
To note, in the last update of the backlog at year-end, we already included the sell down of the two FPSOs in Brazil, with 55% of these projects in the Lease and Operate bar and the partial divestment to partners of the corresponding 45% share reported in the Turnkey component. Looking at the net cash to be generated on an after-tax basis, average expected net Lease and Operate cash flow from the blue bars has grown to $315 million per annum for the 28-year period. That's above the $300 million average at year-end 2021. As ever, important to note that this cash flow is underpinned by contracts from premium clients supporting carbon-efficient projects with very low operating breakevens.
Updating our discounted cash flow analysis of Lease and Operate and BOT cash flows to include One Guyana at the usual range of discount rates, you see a big increase in the range, now 24-28 EUR per share, compared with 19-23 EUR at year-end 2021. That's basically double the current share price. In addition to One Guyana, there's a big impact from the exchange rate here of around 3 EUR per share. Just looking at capital allocation next, that the key elements around growth remain similar. We've delivered Unity that added the larger 100%-owned One Guyana FPSO, maintaining 5 large FPSOs under construction. As you just heard, we're progressing our activities in floating offshore wind, with the outlook on spend remaining in line with the previous guidance.
In terms of equity acceleration, fair to say that with the current volatility in pricing levels, at the moment, debt capital markets are not attractive. However, we're working on a number of opportunities so that we're ready when a window of opportunity arrives. At the same time, the basis of our capital allocation model has grown, with total net cash expected to be generated from the Lease and Operate backlog, increasing to $9.5 billion, including the BOTs. This supports our ability to fund growth, but also offer very attractive long-term shareholder returns with the dividend yield at more than 7%. Finally, to cover all the elements of the guidance, EBITDA revised upwards to above $950 million from around $900 million.
Revenue is revised to around $3.2 billion, driven by an increase in Lease and Operate revenue from around $1.6 billion to around $1.7 billion. Turnkey revenue remains above $1.5 billion. That's it for me. Now back to Bruno.
Thank you, Douglas. A few words to conclude the prepared section of our call. The company delivered good results over the first half of 2022. We significantly revised our guidance for the year, in line with our stated objective as an energy transition company of generating more value while reducing greenhouse gas emissions. We continue to grow with an additional FPSO award and order another Fast4Ward hull. We saw a record-breaking order book with increased net cash flow generation compared to year-end 2021. We're on track to deliver our backlog, and by doing so, we deliver safe, sustainable and affordable energy to the world with industry-leading shareholder returns. We have defined targets for reducing CO2 emissions and delivery of competitive renewable energy solutions with new intermediate targets for greenhouse gas reduction by 2030, in line with our net zero commitment by 2050.
We are progressing on our floating offshore wind with a pilot project under construction and feeding learning into an improved technology design, to develop a commercial wind farm. At SBM Offshore, as an energy transition company, we put our marine expertise and oil and gas experience at the service of responsible future. That's all we wanted to say in the introduction of this call. The call is now open to your question, and we're waiting for those.
Ladies and gentlemen, we will start the question-and-answer session now. To be registered for the question-and-answer session queue, please press
*1 on your keypad. Question has been submitted. The first question comes from Mr. Luuk van Beek from Degroof Petercam. Please go ahead.
Yes. Good morning. Thank you for taking my questions. I have two questions. First on the supply chain issues which you've been able to handle very well, I can say. But I was wondering, do you expect them to continue, say, in a roughly similar manner as you've seen over the past year? Or do you expect it to change because of the long period in which you have, you know, all kinds of disturbances? And can you comment a bit more on how your-
Luuk, I didn't get the first part of your question. Could you do it again, please?
Yes. The question is if you expect the supply chain challenges to remain similar to what you've seen over the last 12 months, or do you expect any changes there because of the length of the disruptions?
I propose Øivind to take a stab at this question on the supply chain and to see where we fit there.
Thank you, Luuk. I think we realize that there is a squeeze in the market, and I think our execution model, building from the Fast4Ward program has been very effective in mitigating some of those risks. We anticipate that this will be with us for a while, and we are also gonna engage in terms of with our clients to see what mitigating measures we could do to obtain through dialogue with those to resist those that sustained pressure further.
I have one follow-up question about the discussions with your customers and new tenders. Because obviously you try to protect yourself from future price increases, but at the same time I can imagine that customers want to protect their return on investment. How are they looking at current tenders? Are they more eager to still continue the projects, or are they worried about the impact of the higher CapEx on their return on investment?
What we're seeing at this stage is, first of all, an impact of the lack of investment over the last decade, and therefore the need for more investment. By the same token, we're seeing our clients being disciplined, much more disciplined than they have been in the past. Third of all, they recognize that the supply chain, as we just discussed, is extremely tight. As such, what we're seeing is really much more engagement up front by some of the key clients, which really help to de-risk the project that they are gonna be doing and to deliver them on time.
It's what I believe is we're gonna see a different ways of working going forward, which is gonna tailor for the competence, the capability, and the knowhow of SBM Offshore, and will allow our clients to deliver on time. This requires really engagement upfront. In summary, for us, we're gonna remain extremely disciplined, and in particular in this cycle, and we're gonna be working with clients who understand the value of bringing value to all stakeholders.
Thank you. Those were my questions for now.
Thank you.
The next question comes from Mr. Thijs Berkelder from ABN AMRO. Please go ahead.
. Good morning. It's Thijs Berkelder, ABN AMRO, out of Amsterdam. A couple of questions for you. Let's first start with a remark. I first want to thank Philippe Barril for his work over the past few years. I'm wishing very good luck in his new job. So, on the questions, can you, that's more financially, can you maybe explain what the startup costs for floating wind have been in the first half. Maybe related to that, in a slide you mentioned, new energy funding needed up to $200 million in co-development funding and $150 million anticipated renewable pilot investments. Where do you stand at this moment, and where can I find that, let's say in the balance sheet. Next topic is also financially.
I'm afraid last year you announced a new share buyback. This time not. While let's say net debt to backlog leverage is more or less the same, why not act again on the share buyback while your NPV is double the current price? What is needed to indeed again act on a buyback? Third question for now is, who will make the seventh Fast4Ward hull?
What was Sorry, could you repeat the last question?
Who will make?
Okay.
Which yards?
Yes.
Okay. Let me take your question on the Float4Wind, the floating offshore wind and the new Fast4Ward hull, in terms, and Douglas is gonna address your two questions on investment and share buyback after that. Floating offshore wind. Let's put things in perspective. Today, installed capacity of floating offshore wind in the world is 150,000 megawatts of installed capacity. Committed is the double of that and will be installed by 2024, 2025. This means that in summary, there is less today installed capacity than the capacity, the power generation on board of one of our FPSO today. It puts things a bit in perspective.
It's a market which is developing, where there is a huge amount of learning curve to be done, even for a company like SBM Offshore, which has been in the business of putting floating anchor system for the past 60 years, and therefore has a great amount of knowledge on this. We're going through the learning curve. We're doing this with method. We're trying to work with clients who are knowledgeable and who are willing to have an open look at the challenge on this. From there, we're gonna be in a process where we're gonna develop more pilot projects before we go to any commitment for a commercial wind farm. It's gonna take time, but it's gonna take time in the market.
I believe that today, the anticipation that the market is gonna go to 16 gigawatts by 2030 is probably overstated. It's gonna be slower than that. We're gonna make the investment that we need to make in order to be competitive and to be successful in this market. Also to make money for all the stakeholders involved. Your question on the next hull, the next MPF hull that we have ordered is with one of the yards that we have been using in the past, SWS, for which we have put a new order. Douglas?
Morning, Thijs. Starting off with the spend on wind. As I mentioned, we see the outlook there in line with what we discussed at the year end. We've got $150 million over the next three years on pilot projects. They're not in the balance sheet, that's going through the P&L. You can roughly look at it phased roughly evenly across the three years. Same goes for the $200 million spend on development projects that we've earmarked. That's, if you like, a kind of a rolling amount. That's, and it's a kind of a maximum exposure we would like to see. Again, spend on that's going through the P&L.
To date, we've only really spent a fraction of that. On the buyback more generally, capital allocation. There's no change compared with what we've been talking about over the past years. We focus on the dividend and growth and then there's an option for the buyback depending on where we sit liquidity-wise. As we discussed at the year end, fair to say that, you know, we've now got a sizable construction portfolio. Like I mentioned, yes, Unity's operating now, but we just added One Guyana, which is pretty big.
The model we have with you know debt financing, the last portion of the CapEx still stands. As we mentioned at the year end, projects are larger. You know in absolute terms you need to put more money in. Looking at the you mentioned the ratio of debt to backlog, probably likely that ticks up a bit given we just added the One Guyana project. You know looking in the round, we've got quite a big investment program ahead of us. We talked about the equity acceleration as an option.
As I mentioned, particularly as of now, given the kind of volatility in the markets, we don't see attractive opportunities there at this point in time. Again, we have a few projects sort of ready to go as and when the conditions improve.
Okay. Thank you.
Thank you.
The next question comes from Mr. Quirijn Mulder from Kepler Cheuvreux. Please go ahead.
G ood morning. A couple of questions. First one on CapEx. Can you fill us in on what you see for CapEx for 2022, and what is the amount that you would have to spend with all of the units coming through in the next few years? That's the first question. Second question, I'm a bit confused on the Anchieta. You said that the contract will be extended by the timing of the shutdown. Does that mean that during that shutdown, you don't receive any sales? You don't receive any EBITDA, so to say? Third question is on the hulls.
Indeed, magazines are pointing to SWS for the hull. It's also said that you're talking to them about producing any modules. That's the first question. Is that right? Secondly, don't you run a risk that with these companies producing both the hulls and the modules that you sort of learn the trick to the Chinese. Is there any danger that with the next step in the integration, some of the products may end up with the Chinese in that respect? Question on the floaters that Brazil is looking at. Over the last number of years, you've been gaining contracts in the lease part. These look to be turnkey.
How do you feel that your chances are, and what's the difference that you are gaining on lease and not on turnkey? Last question is on the combination of a floater and offshore wind farm. We've recently seen the announcement that one of the floaters in the U.K. waters will bring a combination with the floating offshore windmill. Is that a possibility to you? I think the chances are quite slim because you're far more focused on deep water, and I think in that respect the floaters also have their limit. I would like to have your view on that possibility and what you see as sort of the maximum water depth that an offshore wind floater can be used then.
Okay. Plenty of questions this morning. I propose we start with Douglas, who is ready and biting at the bit in order to answer your question. I would take the question on the hull, Brazil, and floating offshore wind.
Good morning, Quirijn. Okay, let's start with the CapEx. We provide a lot of guidance to the market on various topics. Relative to an annual CapEx, that's not something we want to start guiding on. However, I think you actually have quite a lot of information available to make a reasonable judgment on where things stand. You know, the POC of the percentage of completion of the projects. We've actually provided this half the weighted average POC, so 40%. You can look at what we have in the balance sheet and enable you to make some very reasonable forecasts.
Plus I also mentioned figure around working capital, so that will enable you to come up with, I think, a reasonable view on the cash that we need to spend over the next few years on the projects in hand. On Anchieta, how it works is that we extend the contract by the number of shutdown days. We don't get the cash for that until the end. In other words, we're not getting cash at the moment, but from an accounting perspective, in line with the standards, what you do is you linearize the revenue over the lifetime of the contract.
There's a disconnect there between the P&L and the cash flow.
Coming to the market, the first part is on supply chain and construction in particular and the positioning of China. I'm not gonna expand on how we do construction in China and which model we have, you know, where we are using the hull. What I'm gonna expand is on the competitive advantage of SBM Offshore. What we bring is not only hardware, but is an asset which has a full life cycle view on knowing what it takes to make it operate with a 99% of time, to improve all the time on this, and to do continuous improvement. This is a unique knowledge that SBM Offshore has, given the established base that we have, given the investment we have made over the years in our engineering project management capability, but also digitalization.
This is something which is extremely difficult to replicate. Having construction capability obviously is one element of it, but it's really an element which is visible, but it's not where the full knowledge of a company is and where the strength of a company is. It links to your question on Brazil and the reason operate versus turnkey activity. What is clear today is that there is far too much demand in the market for new FPSO, compared to the available supply in the market. As such, some clients have decided to go under the turnkey model, even though they fully recognize that this is a model which is not delivering the same level of value. It's more expensive and it takes longer. You probably have seen in the slide 8 that we have done.
When you look at the delivery of turnkey units, on average, it takes 2.5 years longer than what the contract initial date was compared to Lease and Operate units. This difference of 1.5 years actually between Lease and Operate and turnkey units has actually a cost to the clients of somewhere in the range of $600 million-$1 billion. That's a significant cost. The issue that they are facing today is that there is not enough competent capacity in the market to deliver their project. They're trying to find different sources, and they're trying to find different ways of doing that. At the end of the day, it's gonna cost them more money, and it's gonna have more impact to their delivery.
With regard to floating offshore wind, and just to be complete on that, for us, as SBM Offshore, what we're looking at is, we have a capacity of around 6 FPSO under construction at different stage in our portfolio. What we're looking at is really to be able to engage upfront with our clients, to be able to plan the delivery, and to be able to deliver those projects on time, in order for them to generate value and the value that they want. You see, what has been done over the past 2 years in Guyana is pretty remarkable. The level of production that we have achieved, while the discovery was done less than 7 years ago, is unique in the industry.
That's a model we would like to replicate with a number of other clients. The last point, floating offshore wind, you spoke about upgrade, so linking a floating offshore wind turbine with an FPSO. There could be some opportunity there, but it would be more for testing the floater than anything else. It's not what the commercial farms are gonna be. We're looking at some of those opportunities. The problem is when you're closer to the equator, the wind is not conducive to do this type of development, or it would cost a lot of money for limited output. That's not a market which is gonna be a massive market, but there could be some opportunity from time to time.
Okay, thank you.
Ladies and gentlemen, if there are any additional questions or remarks, please press *1. The next question comes from Mr. Richard Klijnstra from ING. Please go ahead.
G ood morning, gentlemen. You mentioned the success in Guyana. At the same time, it has been relatively quiet, I think, with regards to Petrobras. Could you elaborate a little bit on the outlook that you see there for the company and what's still left there for you?
I mean, relatively quiet. We have three projects under construction for Petrobras, so I'm not calling this quite quiet , maybe we have a different notion of quietness. If you look.
No, I mean, we've seen Búzios 9 and 10, I think, go to somebody else. I'm just wondering.
After that, what's the current outlook for you there?
Again, coming back to my previous answer, they went into a turnkey model given the lack of available capacity in the market. Time will tell if this was a good model or not. History over the past 20 years, I mean, it's not history over the past two, three years. History over the past 20 years has shown that turnkey delivery is not the way to go for FPSO delivery. Again, this is impacted by the fact that there is limited capacity of capable contractor to develop, to build and to bring to production those units.
Now, if you look forward, if you look at the overall market, we mentioned that over the coming 3 years, we see 9 FPSO on average, 9 FPSO awarded per year, 3 of which are of large size. Again, for us what we're gonna be looking at is the, what is the best way for us to generate value to all stakeholders. That's the best way for us to be able to engage upfront with our clients and, to be able to bring our Fast4Ward solution and emissionZERO solution to the market. That's what we're looking at. It's not targeting a particular client, it's really looking at, generating value to all stakeholders.
All right. Clear. Thank you very much.
No further questions?
We currently have no further questions. As a reminder, if you'd like to ask a question, please press *1.
That's okay. We are on top of the hour at this stage, so would like to thank everybody for joining this call. Again, the company has delivered good results for the first half of 2022. Plenty of things happening and good evolution of the company. Again, thank you for your participation, and you can now all resume your normal activity. Thank you.
Ladies and gentlemen, thank you for attending. This concludes this SBM Offshore event call. You may now disconnect your line.