Odfjell Drilling (ODL) Q1 2026 earnings summary

Executive summary

• Q1 2026 delivered excellent financial results, with revenue and EBITDA up significantly year-over-year, driven by high fleet utilization and increased day rates, resulting in EBITDA of $154 million from $284 million in revenue.

• Net profit reached $73 million, and the quarterly dividend was increased to $0.25 per share, marking the sixth consecutive quarterly increase.

• The fleet remains fully contracted, with a robust contract backlog of $2.3 billion ($2 billion firm, $0.3 billion in options), securing cash flow into at least mid-2027.

• Addressed a major equipment incident on Deepsea Atlantic, resulting in temporary rig downtime but no injuries or environmental impact; insurance is expected to cover recovery and repair.

• Continued deleveraging, reducing leverage ratio to 1.6x and maintaining a robust equity ratio of 55%.

Financial highlights

• Q1 2026 operating revenue was $284 million, up from $204 million in Q1 2025 and $245 million in Q4 2025.

• EBITDA reached $154 million (54% margin), up from $100 million in Q1 2025 and $124 million in Q4 2025.

• Net profit for the quarter was $73 million, more than doubling from $31 million a year earlier.

• Net debt reduced by $25 million to $883 million; available liquidity at $295 million, including $68 million in cash and $227 million undrawn RCF.

• Cash flow from operations was $123 million; $55 million in dividends paid for Q4 and $60 million declared for Q1.

Outlook and guidance

• Market for harsh environment rigs remains tight, especially in Norway, with high barriers to entry and strong client demand for Tier 1 rigs.

• All owned units are fully contracted until at least mid-2027, with options extending to 2030 for some units.

• Management expects Deepsea Atlantic to return to operation in three to four months, with insurance covering equipment repair/replacement and some operating costs.

• Demand outlook is positive, with Norwegian clients aiming to increase drilling activity and project maturity aligning with next fleet availability.

• Continued focus on operational excellence and safe return of Deepsea Atlantic to service.