Odfjell Drilling (ODL) Q3 2024 earnings summary

Executive summary

• Q3 2024 delivered strong operational and financial results, with revenue of USD 186 million and EBITDA of USD 83 million, despite 19 days of downtime for Deepsea Atlantic's SPS, which was completed ahead of schedule and on budget.

• Net profit for Q3 was reported at USD 19 million, with some sources noting USD 21 million due to prior year adjustments.

• Financial utilisation remained high at 97–98.8%, and a quarterly dividend of USD 14.4 million (USD 0.06 per share) was declared, with intentions to increase from Q4 2024.

• Order backlog stands at USD 2 billion, securing revenue until at least mid-2026.

• Balance sheet remains robust with leverage ratio at 1.7x and equity ratio at 63%.

Financial highlights

• Q3 2024 revenue was USD 186 million, flat year-over-year, and EBITDA was USD 83 million.

• Net profit for Q3 was USD 19 million, with some sources noting USD 21 million due to adjustments.

• Own fleet contributed USD 144 million in revenue and USD 77 million in EBITDA (53% margin); external fleet contributed USD 42 million in revenue and USD 7 million in EBITDA (17% margin).

• Net debt reduced to USD 532 million; leverage ratio at 1.7x.

• Available liquidity stood at USD 227 million, including USD 109 million undrawn RCF.

Outlook and guidance

• Firm contract backlog of USD 2 billion until at least mid-2026, with most units contracted through 2027.

• Day rates are increasing as units transition off legacy contracts, with more units expected to move to higher rates in early 2025.

• Intention to increase quarterly dividend remains unchanged, with potential to at least double the dividend in 2025.

• Market demand in Norway expected to rise from 2026, with a need for at least 1–2 additional rigs; international demand, especially in West Africa, is anticipated to pick up in late 2025 and 2026.

• Board remains confident in long-term prospects and plans to increase quarterly dividends as rigs transition to higher day rates.