Japan’s MODEC Inc. said on Friday its net profit for the first half (H1) of 2025 rose 17% from a year earlier, buoyed by revenues from engineering, procurement, construction and installation (EPCI) projects and a record order book, even as operating margins were steady.
The floating production systems supplier reported net income of US$145 million for the first six months of 2025 (January – June 30), compared with US$124 million a year earlier. Revenue rose 10% to US$2.07 billion, driven by progress on major offshore oil projects including Raia, Uaru and two newly awarded contracts – Shell’s Gato do Mato and ExxonMobil’s Hammerhead – which offset weaker contributions from maturing assets.
Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was broadly flat at US$180 million, as stronger EPCI earnings largely offset a slight decline in operations and maintenance (O&M) segment profits. The O&M segment faced headwinds from major vessel maintenance and the absence of one-off gains booked in the same period last year.
MODEC’s total backlog jumped 16% from the end of 2024 to a record US$25.5 billion, supported by the new contract awards. The Hammerhead project in Guyana, now in the design phase, is expected to produce up to 150,000 barrels of oil per day (b/d) starting in 2029, while Gato do Mato in Brazil is due online in 2028 with a capacity of 120,000 b/d.
The Tokyo-listed firm, rated BBB/Stable by Fitch, said it maintained a low debt-to-capitalisation ratio of 25% and ended H1 with US$1.49 billion in cash, aided by advance payments for large EPCI projects. Fitch in April cited MODEC’s improved financial profile, stable long-term charter earnings and steady backlog renewal in upgrading the outlook to Stable.
MODEC, which designs, builds and operates floating production, storage and offloading (FPSO) units, said its charter backlog covers 152 cumulative years of contracts with an average remaining life of 12.1 years. The company has brought five new FPSOs into the charter phase over the past three years, supporting revenue diversification across Latin America (notably Guyana and Brazil), West Africa and Asia.
MODEC’s growing footprint in Guyana is a standout element. The company secured a limited notice to proceed (LNTP) in April for the Hammerhead FPSO, its second contract in the country after Uaru. Hammerhead is advancing through front-end engineering and design (FEED), with full EPCI to follow upon final approval.
Meanwhile, the Uaru project, utilizing the Errea Wittu FPSO, is under construction and slated to begin production in 2026 at an initial rate of 250,000 b/d.
In 2024, Guyana-related operations accounted for about one-third of MODEC’s total revenue. MODEC has opened a permanent office in Georgetown, launched offshore trainee and internship programs for Guyanese nationals, and awarded US$3.4 million worth of contracts to local suppliers in 2024, in line with its local content commitments.
