DOF Group (DOFG) Q2 2024 earnings summary

Executive summary

• Announced acquisition of Maersk Supply Service, adding 22 vessels and expanding the global fleet, with closing expected in Q4 2024; transaction to be settled with $577M cash and 25% equity for MSSH.

• Achieved record-high order intake of $1.05B in Q2, with an additional $400M post-quarter, driving a firm backlog of $2.6B and high earnings visibility for the next 24 months.

• Revenue and EBITDA continued to grow, with strong performance in APAC and Atlantic regions, while Brazil lagged due to vessel maintenance and mobilizations.

• Updated 2024 guidance: revenue $1.4–$1.5B, EBITDA $500–$520M, reflecting improved outlook and high backlog coverage.

• Fleet utilization averaged 89% in Q2, with 4,300–5,400 employees worldwide post-acquisition.

Financial highlights

• Q2 2024 revenue reached $361M, up from $330M in Q2 2023; EBITDA was $122M–$123M, slightly above last year.

• Net profit for Q2 2024 was $6M, down from $103M in Q2 2023, mainly due to a $62M non-cash unrealized currency loss from Brazilian operations.

• Net interest-bearing debt reduced to $969M–$1,286M, with an equity ratio of 35–39% as of June 30, 2024.

• Cash flow from operations was $75M–$119M in Q2 2024, with a cash balance of $277M–$355M at quarter-end.

• Q2 2024 EPS: $0.04 (Q2 2023: $0.65).

Outlook and guidance

• Raised 2024 EBITDA guidance to $500–$520M, with strong second-half earnings expected due to high backlog, vessels returning to service, and new contracts.

• Backlog for second half 2024 covers 95% of first-half revenue; 2025 backlog already above $1B, representing 70–75% of expected revenue.

• Anticipates continued EBITDA growth into 2025 and 2026, supported by new long-term contracts at higher rates.

• CAPEX for 2024 revised to $100–$110M, mainly for subsea equipment investments.

• MSS acquisition to close in Q4 2024, creating a leading offshore service provider with 78 vessels and over 5,400 employees.