Odfjell Drilling (ODL) Q2 2024 earnings summary

Executive summary

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

• Order backlog increased to USD 2.1 billion, with new high-value contracts secured and firm coverage until at least mid-2026.

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

• Declared a Q2 dividend of USD 0.06 per share (USD 14.4 million), with ambitions 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 in EBITDA (55% margin); external fleet USD 45 million in revenue and USD 7 million in EBITDA (16% margin).

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

• Net debt reduced to USD 544 million as of 30 June 2024; leverage ratio at 1.8.

• Equity ratio stands at 63% with total assets of USD 2.2 billion; available liquidity is USD 226 million.

Outlook and guidance

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

• Transitioning from legacy to higher day rate contracts, with average day rates expected to exceed USD 400,000 per day in 2025.

• Positive market outlook with anticipated demand growth in Norway and internationally, especially in West Africa and the Orange Basin.

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

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