#Bermuda #Hamilton #Q4 2024 #Borr Drilling #financial report

Borr Drilling Limited Reports Solid Growth in Q4 2024

Borr Drilling Limited has announced its unaudited financial results for the fourth quarter of 2024, showcasing remarkable growth in revenue and net income. The company’s operational performance has demonstrated resilience in a fluctuating market despite various challenges faced throughout the year.

Financial Highlights

In the fourth quarter, Borr Drilling reported total operating revenues of $263.1 million, marking a 9% increase of $21.5 million compared to the previous quarter. The company's net income surged to $26.3 million, a staggering 171% increase or $16.6 million over Q3 2024. Adjusted EBITDA also saw a rise, reaching $136.7 million, which is an 18% improvement from the third quarter.

For the entire year of 2024, net income totaled $82.1 million, reflecting an impressive 271% increase or $60.0 million from 2023. Adjusted EBITDA for the year stood at $505.4 million, up by 37%, equivalent to a growth of $137.6 million year-on-year.

Moreover, Borr Drilling has agreed with a major client in Mexico regarding a payment settlement of about $125 million for outstanding receivables during February 2025. This is a crucial step as the company navigates cash flow and operational demands.

Contract Awards

Throughout 2024, Borr Drilling excelled in winning new contracts, securing nineteen new commitments that translate into approximately 4,500 rig days and an expected $795 million in potential contract revenue. This robust performance not only underscores the confidence in the company’s service offerings but also reflects the navigable waters it has been able to steer through an uncertain market.

CEO's Insight

Patrick Schorn, CEO of Borr, emphasized the solid operational performance. He highlighted that the technical utilization rate reached 98.9%, with an economic utilization rate of 97.1%. Schorn also noted that the shift of rigs “Natt” and “Prospector 1” to higher day rates positively impacted revenues. The changes arose amidst the termination of the “Arabia II” contract in Saudi Arabia, which, despite adverse impacts on day rate revenues, produced a net positive effect yielding adjustments in amortization fees.

As Schorn summarized, “Despite facing multiple headwinds during the year, we successfully delivered our Adjusted EBITDA within the expected range. However, we anticipate persistent challenges in the market landscape, particularly reflected in softening demands heading into 2025.” Still, he expressed cautious optimism as they have identified incremental demands in regions like West Africa and Southeast Asia.

Looking Ahead

Entering 2025, Borr Drilling anticipates further challenges, including a suspension of operations for three rigs in Mexico and idle periods ahead of contract starts for “Arabia I” and “Vali.” Though these factors will impact the first quarter earnings, Schorn reassured stakeholders of liquidity enhancements through upcoming mobilization payments and previous settlements.

The board of directors announced a cash distribution of $0.02 per share for Q4 2024, slated for payout around March 19, 2025. This decision, alongside an existing share repurchase authorization, demonstrates the board's commitment to maintaining a strong balance sheet amid navigating market fluctuations and strengthening the financial foundation for future growth.

Conclusion

Borr Drilling has positioned itself to continue its strategic growth within the global jack-up rig market. The company's ability to adapt and lead despite market uncertainties is a testament to its robustness and forward-thinking strategy. Stakeholders and investors can watch this space closely, as Borr prepares for its conference call to discuss these exciting developments in greater detail.