MODEC (6269): FY2025 Results Summary — Record Revenue, Net Income and EBITDA; Backlog at $26.9B

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Note: MODEC’s fiscal year ends on December 31, and the company reports in US dollars (IFRS). The figures below are for FY2025 (the fiscal year ended December 31, 2025), as presented in the company’s 2025 Investor Presentation dated February 16, 2026. MODEC, Inc. reported FY2025 revenue of $4,581MM (up $395MM or 9% from FY2024), net income of $360MM (up $140MM or 63%) and adjusted EBITDA of $440MM (up $112MM or 34%), with revenue at 104% and net income at 102% of the FY2025 revised guidance ($4,400MM and $350MM). The company stated that overall operating performance remained solid and that the continuous improvement of business segment performance led to another record results two years in a row. Total backlog reached $26.9B, an increase of $4.9B or 22% from FYE2024, supported by two new contract awards (Shell Gato do Mato and ExxonMobil Hammerhead). For FY2026, MODEC guides revenue of $4,600MM, net income of $370MM and EBITDA of $450MM, and plans an annual dividend of JPY200 per share, an increase of JPY60 per share from FY2025.

Consolidated Results (Full-Year Actual)

Revenue for FY2025 totaled $4,581MM, up $395MM from $4,186MM in FY2024. By component, EPCI revenue was $2,892MM (FY2024: $2,910MM, a change of -18), O&M revenue was $1,605MM (FY2024: $1,177MM, +428), Service Fee was $51MM (+3) and Others was $31MM (-19). EPCI revenues were at the same level as compared to FY2024, as higher revenues from two new projects (Gato do Mato, Hammerhead) more than offset lower revenues from mature projects that were either completed (Bacalhau; first oil in Oct ’25) or entered the latter phase of construction (Uaru, Raia). O&M revenues were higher, reflecting higher revenues from West African O&M operations (MV10) and the steady performance of Brazilian O&M operations. EPCI + O&M profits (gross profits excluding Service Fee) rose $162MM to $506MM, and the company noted that gross profits were 47% higher than in FY2024, with revenues up 9%. Charter profits totaled $216MM (FY2024: $237MM, -21), comprising Service Fee of $51MM, Interest Income of $31MM (-4) and Equity in Affiliates of $133MM (-21); the aggregate net income of the SPCs for FY2025 decreased due to asset enhancement work and decommissioning costs for the older FPSOs in Brazil. Total segment profits were $722MM (+141). SG&A increased to $(254)MM (-31), finance income rose to $81MM (+49), and total finance expense narrowed to $(42)MM (+41). Earnings before tax were $508MM (FY2024: $307MM, +201), tax was $(97)MM and minority interest was $(49)MM, resulting in net income of $360MM (FY2024: $220MM, +140). Against the FY2025 guidance, revenue of $4,581MM exceeded the $4,400MM guidance by $181MM, operating income of $437MM was $(3)MM below the $440MM guidance, earnings before tax of $508MM were $8MM above the $500MM guidance, net income of $360MM was $10MM above the $350MM guidance, and EPS of US$5.27 was US$0.15 above the US$5.12 guidance.

Item (US$ MM)	FY2024	FY2025	2024 vs 2025
EPCI revenue	2,910	2,892	– 18
O&M revenue	1,177	1,605	+ 428
Service Fee	48	51	+ 3
Others	50	31	– 19
Revenue Total	4,186	4,581	+ 395
EPCI + O&M Profits (excluding Service Fee)	344	506	+ 162
Charter Profits Total	237	216	– 21
Total Segment Profits	581	722	+ 141
SG&A	(223)	(254)	– 31
Finance Income	32	81	+ 49
Finance Expense Total	(83)	(42)	+ 41
Earnings Before Tax	307	508	+ 201
Tax	(44)	(97)	– 53
Minority Interest	(42)	(49)	– 7
Net Income	220	360	+ 140
Adj. EBITDA before Unusual Items	328	440	+ 111

FY2025 EBITDA reached $440MM, a record high, reflecting increased earnings from the EPCI and O&M segments, which more than offset lower Charter earnings and higher SG&A expenses. The company stated that, with the earnings enhancements from EPCI and O&M in recent years, its earnings are well balanced across the three service segments as well as in terms of clients / revenue diversification. Financial metrics continued to improve, as evidenced by low cash flow leverage (debt/EBITDA of 1.0x) and low balance sheet leverage (debt/capitalization of 22% and debt/equity of 29%). Cash & deposits stood at $1,326MM, total debt at $420MM, equity at $1,452MM and capitalization at $1,873MM at the end of FY2025; the company noted that the large cash on hand of approx. $1.3 billion largely reflects advance payments for the large EPCI projects. On the balance sheet, total assets increased $266MM to $4,762MM, contract liabilities rose $184MM to $1,061MM, retained earnings increased $305MM to $1,027MM, and equity rose $272MM to $1,452MM.

Key Financial Items (US$ MM)	FY2024	FY2025
Cash & Deposits	1,253	1,326
Total Debt	514	420
Equity	1,180	1,452
Capitalization	1,694	1,873
Debt / Adj. EBITDA before Unusual Items	1.6 x	1.0 x
Debt / Capitalization	30%	22%
Debt / Equity	44%	29%

Segment Results and Backlog

MODEC operates three service segments: EPCI (engineering, procurement, construction and installation of FPSOs), Charter and O&M. In EPCI, the company reported steady progress on the Raia, Uaru, Gato do Mato and Hammerhead projects and two new contract awards (Shell Gato do Mato and ExxonMobil Hammerhead). The EPCI segment increased profits as higher earnings from the new projects (Gato do Mato) more than offset lower earnings from mature projects. In O&M, the existing vessels delivered steady operating performance, and segment earnings increased, supported by steady fleet performance and higher earnings from West Africa O&M operations (MV10). Charter earnings were stable under long-term availability-based contracts; MODEC does not consolidate its minority stakes in the SPCs, and its share of the SPCs’ net earnings is recognized under the equity method. EPCI backlog reached a historical high of $5.7B (US$ Bn) at the end of 2025, up from $2.9B at the end of 2024, due to the two new large contracts awarded in March (Shell Gato do Mato) and September (ExxonMobil Hammerhead). O&M backlog also reached a historical high of $12.2B with a remaining average life of 14.2 years, reflecting the 20-year O&M contract for Gato do Mato and the 10-year O&M contract for Hammerhead. The Charter business has 146 cumulative years of contracts with an 11.8-year remaining average life and $8.8B of backlog. Total backlog was $26.9B, up $4.9B or 22% from FYE2024.

Segment	Metric (US$ MM unless noted)	FY2024	FY2025
EPCI	Revenue	2,910	2,892
O&M	Revenue	1,177	1,605
EPCI + O&M	Profits (excluding Service Fee)	344	506
Charter	Service Fee	48	51
Charter	Interest Income	35	31
Charter	Equity in Affiliates	154	133
Charter	Charter Profits Total	237	216
EPCI	Backlog (US$ Bn)	2.9	5.7
O&M	Backlog (US$ Bn)	9.3	12.2
Charter	Backlog (US$ Bn)	–	8.8
Total	Backlog (US$ Bn)	–	26.9

FY2026 Forecast

For FY2026, MODEC guides revenue of $4,600MM (+19 versus FY2025 actual), operating income of $460MM (+23), earnings before tax of $500MM ((8)), net income of $370MM (+10), EPS of US$5.41 (+US$0.14) and EBITDA of $450MM (+10). Both revenues and profits are expected to be slightly higher than in FY2025. All three business segments are expected to increase profits, due primarily to higher revenues and profits from Gato do Mato and Hammerhead in EPCI, continued improvement of fleet-wide performance in O&M, and the absence of non-recurring costs incurred in FY2025 in Charter. The company also stated that investments for future growth shall be increased in such areas as R&D, business development and/or digital technology.

Item (US$ MM)	2025 Guidance	2025 Actual	2025 Guidance vs 2025 Actual	2026 Guidance	2025 Actual vs 2026 Guidance
Revenue	4,400	4,581	+ 181	4,600	+ 19
Operating Income	440	437	(3)	460	+ 23
Earnings Before Tax	500	508	+ 8	500	(8)
Net Income	350	360	+ 10	370	+ 10
EPS (US$)	5.12	5.27	+US$0.15	5.41	+US$0.14
EBITDA	―	440	―	450	+ 10

Shareholder Returns

For FY2025, MODEC paid an interim dividend of JPY60 per share (actual) and, subject to the General Shareholders Meeting in March 2026, plans to pay a year-end dividend of JPY80 per share (guidance). For FY2026, the company plans to pay an annual dividend of JPY200 per share, increasing by JPY60 per share from FY2025, consisting of an interim dividend of JPY100 (guidance) and a year-end dividend of JPY100 (guidance). Key stock data in the presentation show 68,345,300 shares outstanding, EPS (US$ / LTM) of 5.27 and EPS (US$ / Guidance) of 5.41.

Dividend per share (JPY)	FY2025	FY2026 (Guidance)
Interim	60 (actual)	100
Year-end	80 (guidance)	100
Annual	–	200

Topics: New Contracts, Deliveries and Credit Ratings

In March 2025, MODEC was awarded the EPCI and O&M (20 years) contracts for the Shell Gato do Mato FPSO in Brazil, following the successful execution of the FEED contract awarded in March 2024; the FPSO will be capable of 120,000 barrels of oil per day, moored at a water depth of approximately 2,000 meters, with first oil targeted for 2028. In September 2025, following ExxonMobil’s Final Investment Decision, MODEC was awarded the EPCI and O&M contracts for the ExxonMobil Hammerhead FPSO in Guyana (after a Limited Notice to Proceed in April 2025); the FPSO will be capable of producing 150,000 barrels of oil per day at a water depth of approximately 1,025 meters, with first oil targeted for 2029, and MODEC will provide O&M services for 10 years from first oil. The Equinor Bacalhau FPSO achieved first oil on October 15, 2025, marking MODEC’s 17th FPSO/FSO delivery in Brazil and its first collaboration with Equinor; the unit is capable of producing 220,000 barrels of oil per day and is designed with Gas Turbine Combined Cycle technology capable of reducing more than 100,000 tons of CO2 emissions annually. MODEC also opened the Kuala Lumpur Execution Center (April 15, 2025) and the Global Capability Center in Bengaluru (June 13, 2025), and initiated new technology developments including offshore carbon capture (CycloneCC), a Solid Oxide Fuel Cells study onboard FPSOs (targeting a 120kW SOFC system pilot trial by 2027 with Eld Energy and Delta Electronics), the i-TLP2 concept for offshore wind, a Liquid CO2 Floating Storage and Injection Unit (AiP received) and a Floating Nuclear Power Plant collaboration with Advanced Float. On credit ratings, Fitch Ratings upgraded MODEC to BBB / Stable Outlook on April 14, 2025 (previous rating BBB- / Positive Outlook), and in December 2025 Moody’s assigned an investment-grade Baa3 rating with a Stable outlook to the senior secured notes due 2034 issued by Cernambi Sul MV24 B.V. (USD 1.1 billion, USD 763 million outstanding).

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.