SED Energy Holdings (ENH) Q2 2024 earnings summary

Executive summary

• Achieved seventh consecutive quarter of positive EBITDA, with both vessels on firm contracts and high utilization rates, including 89% fleet utilization in Q2 2024.

• Both Eagle Explorer and Fulmar Explorer are operating in the US Gulf of Mexico, with contracts extending into 2025 and a 26-month firm backlog secured.

• Revenues and EBITDA declined year-over-year due to vessel mobilization and revenue mix, but cash flow from operations improved.

• Board proposed a cash distribution of NOK 0.25 per share, completed in June 2024, with a second distribution proposed for Q4.

Financial highlights

• Q2 2024 revenue was USD 4.9m, down from USD 9.7m in Q2 2023, mainly due to Eagle Explorer's mobilization.

• EBITDA was USD 1.5m, down from USD 4.6m year-over-year; EBIT was near breakeven at USD -0.01m.

• Net loss for Q2 2024 was USD 0.5m, compared to a net profit of USD 2.1m in Q2 2023.

• Cash flow from operations was USD 2.9m, up from USD 0.9m in Q2 2023; net interest-bearing debt reduced to USD 12.9m.

• Equity ratio at 53% (Q2 2023: 54%).

Outlook and guidance

• Sold out of vessel capacity until July 2025, with options extending to July 2026 and strong market outlook.

• Expect significant increases in revenue and EBITDA in coming quarters as both vessels are fully operational.

• OBN market expected to remain strong, with potential for higher day rates and further market growth.

• Company is well positioned for high vessel utilization and to capitalize on both OBN and 2D market opportunities.

• Further dividends contingent on continued strong operational performance.