Shelf Drilling (North Sea) (SDNS) Q1 2025 earnings summary

Executive summary

• Achieved strong operational execution in Q1 2025 with 99.4% fleet uptime, improved safety performance, and implementation of an HSE turnaround plan after early incidents; TRIR of 0.24, outperforming industry average.

• Adjusted EBITDA rose 13% sequentially to $96.2M (40% margin), with net income of $14M and liquidity increasing to $332M.

• Completed successful rig relocations to West Africa, with four rigs redeployed since 2024 and three contracted.

• Maintained a robust backlog of $1.6 billion as of March 31, with 29 of 33 rigs contracted at an average day rate of $100,000.

• Navigated market volatility and geopolitical uncertainty, focusing on operational excellence, capital discipline, and proactive marketing.

Financial highlights

• Adjusted revenue for Q1 2025 was $243 million, up 8% sequentially, driven by new contract commencements and higher dayrates.

• Adjusted EBITDA reached $96.2 million (40% margin), up from $85 million (38% margin) in Q4 2024.

• Net income for Q1 2025 was $14 million; cash and cash equivalents rose by $54.3M to $206.6M.

• Quarter-end cash balance was $207 million, with total liquidity of $332 million including an undrawn revolving credit facility.

• Operating and maintenance expenses were $129 million, and G&A expenses increased to $17 million.

Outlook and guidance

• Full-year 2025 adjusted EBITDA guidance is $310–$360 million, revised down due to early contract termination in Denmark.

• Anticipates improved revenues and utilization in H2 2025 as redeployed rigs return to service.

• Lowered 2025 capital spending guidance to $85–$115 million, with expected higher free cash flow.

• Confident in liquidity position, not expecting to draw on revolving credit facility in 2025 or 2026.

• Q4 2025 revenues projected to rise due to rigs mobilizing to West Africa; SDNS contribution revised lower due to idle time in Denmark.