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TechnipFMC: Lowest Oilfield Services Free Cash Company in Q1 2018

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TechnipFMC’s operating cash flows

TechnipFMC’s (FTI) cash flow from operating activities (or CFO) was negative in the first quarter and declined sharply year-over-year. It generated -$201 million of CFO in the first quarter. Year-over-year, its revenues declined following its subsea project completions in Africa and project completions in its Onshore-Offshore segment. That was partially offset by an increased demand for hydraulic fracturing, wellhead, and flow metering equipment in North America.

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TechnipFMC’s free cash flow and capex

FTI’s capex increased 4% YoY (year-over-year) in the first quarter. Negative CFO coupled with rising capex resulted in a deterioration of its free cash flow (or FCF), which turned negative in the first quarter to -$254.8 million. It has been negative only once in the past five quarters.

FTI makes up 0.55% of the iShares Global Energy ETF (IXC), which tracks an index of global equities in the energy sector. The oil and gas equipment and services sector accounts for 7.5% of IXC. In the past year, IXC has risen 18% compared to a 6.6% rise in FTI stock in the same period.

In comparison, FTI’s lower market cap OFS industry peer Superior Energy Services’ (SPN) first-quarter FCF was -$90.7 million compared to -$63.9 million the previous year. Although SPN’s year-over-year CFO improved in the first quarter, its capex increased more, which led to a decline in its FCF.

FTI’s capex plans for 2018

In 2018, FTI plans to incur $300 million in capex, excluding any contingent capital that may be needed to respond to a contract award. That would be 18% higher than its 2017 capex.

Next, let’s take a look at Weatherford International’s (WFT) cash flow and capex.

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