Constellation Oil Services (COSH) Q4 2024 earnings summary

Executive summary

• Achieved exceptional operational and financial results in 2024, including 97% fleet uptime, a $2.1 billion backlog, and top ranking in Petrobras Offshore Driller Ranking.

• Completed major recapitalization and refinancing in December 2024, reducing leverage and strengthening the balance sheet, with shares listed on Euronext Growth Oslo.

• Secured five new contracts in H2 2024, increasing backlog by 31% to $2.1 billion, and won Petrobras bid for Admarine 511.

• Significant corporate restructuring included sale of onshore rigs and focus on offshore operations.

• Management Incentive Plan implemented and partially vested following recapitalization.

Financial highlights

• Adjusted EBITDA rose to $231 million in 2024, with margin improving to 40.9% from 33.6% in 2023.

• Net operating revenues increased to $564 million, up 2% year-over-year and 22% above guidance.

• Operating cash flow reached $224 million, up 52% from 2023.

• Adjusted net loss narrowed to $28.6 million from $69 million in 2023.

• Net debt reduced by 47% to $454 million, with net debt/EBITDA improving to 2x from 4.7x.

Outlook and guidance

• 2025 expected to be a transitional year with five contract transitions, leading to lower revenue and EBITDA ($535–$555 million revenue, $160–$180 million EBITDA).

• Significant growth anticipated in 2026 as new contracts become fully operational, with base case EBITDA potential of $470 million.

• 2025 CapEx guidance at $150 million, mainly for contract transitions; normalized annual CapEx expected at $55–$60 million post-2025.

• Plans to introduce dividends and/or share buybacks starting in 2026, contingent on reaching 1.25x net leverage.

• Management expects continued strong performance in 2025, supported by robust backlog and improved balance sheet.