Seadrill (SDRL) Q2 2024 earnings summary

Executive summary

• Delivered Q2 2024 EBITDA of $133 million on $375 million in revenues, with a 35.5% EBITDA margin; H1 EBITDA totaled $257 million.

• Achieved operating profit of $288 million and net income of $253 million, with diluted EPS of $3.49.

• Lowered H2 expectations due to revised contract start dates for two rigs moving to Brazil and uncommitted near-term rig availability.

• Transition year with fewer rigs operating as units are prepared for long-term contracts and maintenance.

• Remain confident in the long-term outlook for deepwater drilling despite near-term volatility and demand delays.

Financial highlights

• Q2 contract drilling revenues were $267 million, down $8 million sequentially due to rigs in preparation for Brazil contracts.

• Management contract revenues included a $65 million inflationary increase for Sonadrill rigs, retroactive to January 1.

• Leasing revenues of $26 million included two quarters of bareboat charter income.

• Vessel and rig operating expense was $165 million, down from $180 million in Q1.

• Free cash flow for Q2 2024 was $36 million; cash flow from operations was $79 million, including $60 million in long-term maintenance costs.

Outlook and guidance

• Full-year 2024 EBITDA guidance lowered to $315–$365 million, reflecting rig start delays and softer speculative contracting.

• Revenue guidance for 2024 is $1.355–$1.405 billion; CapEx guidance unchanged at $400–$450 million.

• Delays in Auriga and Polaris start dates push EBITDA into future periods but are not expected to impact 2025 and beyond.

• Additional work for Sevan Louisiana could provide upside to guidance midpoint.

• Approximately 67% of fleet contracted through 2025, with strong JV presence in Angola and active Gulf of Mexico market.