Odfjell Drilling (ODL) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached USD 191 million, with EBITDA of USD 85 million and 98% financial utilisation across the fleet.

• Order backlog increased to USD 2.1 billion, supported by new high-value contracts, with all units contracted until at least mid-2026.

• Deepsea Atlantic completed SPS and upgrades ahead of schedule and on budget, moving to a higher day rate contract.

• Declared a Q2 dividend of USD 14.4 million (USD 0.06 per share), with ambition to increase dividends as higher day rates are realized.

• Net profit for Q2 2024 was USD 16 million, up from USD 11 million in Q2 2023.

Financial highlights

• Q2 2024 operating revenue was USD 191 million, up USD 7 million year-over-year, mainly due to increased activity in the External Fleet segment.

• Own fleet contributed USD 145 million in revenue and USD 80 million EBITDA (55% margin); external fleet USD 45 million revenue and USD 7 million EBITDA (16% margin).

• Net profit for Q2 was USD 16 million; USD 30 million for the first half of 2024.

• Net debt reduced to USD 544 million; leverage ratio at 1.8x; equity ratio at 63%; available liquidity at USD 226 million.

• Net cash flow from operating activities in Q2 2024 was USD 71 million.

Outlook and guidance

• All owned fleet units have firm backlog until at least mid-2026, with most until 2027.

• Transitioning to higher day rate contracts in H2 2024 and 2025, with average day rates expected above USD 400,000 per day.

• Positive market outlook, especially in Norway and internationally in West Africa and the Orange Basin, with expectations for increased demand and longer-term contracts in 2025-2027.

• No newbuilds expected to enter the market soon, supporting robust day rates and balanced supply-demand.

• Ambition to increase dividends starting with Q4 results, supported by higher cash generation.