Odfjell Technology (OTL) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached NOK 1.33 billion, up NOK 59 million year-over-year, with a strong order backlog of NOK 13.7 billion and available liquidity above NOK 1 billion.

• EBITDA for Q3 2024 was NOK 201 million, down NOK 11 million from Q3 2023, with a margin of 15% versus 17% last year.

• Net profit for Q3 2024 was NOK 39 million, down from NOK 85 million in Q3 2023, impacted by one-off refinancing costs.

• Dividend increased to NOK 60 million, up 140% year-over-year, with a yield of 12%.

• Acquisition of McGarian TDC Ltd. in May 2024 expanded capabilities in Slot Recovery and Plug and Abandonment.

Financial highlights

• Q3 2024 revenue grew 5% year-over-year to NOK 1,334 million; EBITDA declined 5% to NOK 201 million due to product mix and higher costs.

• Net profit for Q3 was NOK 38.6 million, down from NOK 84.8 million in Q3 2023.

• Free cash flow for Q3 was NOK 27.2 million; YTD free cash flow at NOK 51 million.

• Cash and cash equivalents at quarter-end were NOK 514 million; available liquidity at NOK 1,039 million.

• Leverage ratio at 0.7, well below the 1.5 threshold.

Outlook and guidance

• CapEx for 2025 expected to be around NOK 250 million, lower than 2024; 2024 CapEx estimated at NOK 280–320 million.

• Market activity expected to remain flat through 2024, with ramp-up in late 2025; stable markets in Norway and UK, growth potential in South America and Africa.

• Well Services margins expected to return to mid-30%+; P&E margins around 15%; Operations margins in high single to low double digits.

• Focus on cost efficiency, margin improvement, and scaling M&A contributions through 2026.

• Anticipates improvement in working capital in Q4 and into 2025.