Nabors Industries (NBR) Q4 2023 earnings summary

Executive summary

• Q4 2023 adjusted EBITDA was $230.1M, up from $210.0M in Q3; Q4 revenue was $726M, down from $734M.

• FY2023 revenue rose 13% to $3.0B and adjusted EBITDA grew 29% to $915.2M.

• Operating priorities included Lower 48 performance, international rig growth, technology adoption, debt reduction, and energy-transition initiatives.

Financial highlights

• Q4 net income was $3.9M versus net losses of $31.2M in Q3 and $58.2M in Q4 2022; attributable net loss was $17M versus $49M in Q3.

• FY2023 attributable net loss narrowed to $11.8M from $350.3M; adjusted operating income rose to $269.9M from $44.3M in 2022.

• Q4 adjusted free cash flow was $52.2M, from $181.9M operating cash flow less $129.7M net capital expenditures.

• FY2023 adjusted free cash flow was $111.1M; net cash provided by operating activities was $637.9M.

Outlook and guidance

• SANAD had five rigs operating, with three more expected in 2024; 15 rigs had been awarded within a 50-rig, 10-year program.

• International opportunity set reached 104 rigs by YE 2025, including awards, contracts, negotiations, and tenders; tenders for 12 additional rigs were under negotiation.

• Q1 Lower 48 average rig count guidance was 73–75, with daily adjusted gross margin of ~$15,300; Alaska and Gulf of Mexico adjusted EBITDA was expected to rise $1.5M–$2.0M.

• Q1 International rig count was expected to rise by ~2 rigs QoQ, with daily adjusted gross margin guidance of $16,100–$16,300; Drilling Solutions and Rig Technologies EBITDA guidance was $30M–$31M and $5M–$6M.

• FY2024 U.S. average rig count was expected to approach 2023 levels; significantly higher adjusted free cash flow and net debt reduction were targeted.