Borr Drilling (BORR) Q1 2025 earnings summary

Executive summary

• Q1 2025 results showed a decline in operating revenue and adjusted EBITDA due to temporary rig suspensions and contract transitions, but operational performance and safety remained strong, with technical utilization at 99.2% and economic utilization at 97.9%.

• Activity ramped up in Q2 as three rigs in Mexico resumed operations and new contracts for Vali, Arabia One, Thor, and Ran increased the operating rig count to 22, supporting anticipated earnings improvement.

• Contract coverage for 2025 stands at 79% with an average day rate of $147,000, expected to rise to 80%-85% soon, and commercial focus is shifting to 2026 opportunities.

• Liquidity improved significantly with $120 million in receivables collected from Mexico and $10 million in mobilization fees, raising cash and cash equivalents to $170 million.

• Dividend was suspended to reinforce the balance sheet amid uncertain market conditions.

Financial highlights

• Q1 2025 total operating revenues were $216.6 million, down $46.5 million (18%) from Q4 2024, with adjusted EBITDA at $96.1 million, a decrease of $40.6 million (30%) quarter-over-quarter.

• Net loss for Q1 was $16.9 million, a $43.2 million swing from net income in Q4.

• Cash and cash equivalents increased to $170 million from $61.6 million, with total available liquidity of $320 million including undrawn RCF.

• Net cash provided by operating activities was $138.7 million, mainly from receivables and mobilization fees.

• Total equity at March 31, 2025 was $974.9 million.

Outlook and guidance

• Management is comfortable with Bloomberg consensus for 2025 adjusted EBITDA of $460 million, with significant increases expected in subsequent quarters.

• 2025 fleet coverage is 79% at an average day rate of $147,000, with expectations to reach 80%-85% soon and commercial focus on 2026.

• Operating rig count increased to 22, expected to drive stronger financial performance in coming quarters.

• No dividend declared to reinforce the balance sheet amid market uncertainty.

• Long-term fundamentals remain strong despite short-term volatility; no newbuilds expected to enter the market soon.