Borr Drilling Limited Earnings Recaps
Shares fell 5.2% as investors reacted negatively to the clear deceleration in EBITDA driven by higher costs associated with Odin’s delayed contract start, rig transition disruptions, escalating operating expenses in a volatile geopolitical environment, and a material credit loss provision.
Key takeaways
- Adjusted EBITDA declined sharply by $44.7 million sequentially to $43.8 million, pressured by $22.5 million in Odin-related operating expenses before revenue generation.
- Six rigs transitioned between contracts, reducing utilization and revenue recognition during the quarter; this elevated transition activity is now largely resolved.
- Operating expenses jumped $31.1 million quarter-over-quarter, including $7.3 million in increased insurance and fuel costs linked to Middle East conflict and contract transitions.
- A $10.8 million credit loss on a former West African customer was recognized, fully provisioning receivables from this counterparty.
- Despite the challenges, the company expects Q3 EBITDA to improve significantly as rig utilization stabilizes and Odin commences contracted operations.
Shares fell 8.7% after Borr Drilling reported a disappointing quarter marked by lower-than-expected revenues and an $8.4 million credit loss provision, compounded by a delayed start-up of the key Odin rig that suppressed near-term earnings and increased operating expenses.
Key takeaways
- Q1 revenue declined 4.8% sequentially to $247 million, driven by a $15.5 million drop in dayrate revenue due to fewer operating days and lower dayrates on some rigs.
- Adjusted EBITDA fell $16.7 million quarter-on-quarter to $88.5 million, negatively impacted by the $8.4 million credit loss provision and ongoing expenses related to Odin’s delayed mobilization.
- Odin rig’s start-up delayed to late June, resulting in no earnings from the rig this quarter but ongoing preparatory costs including a forecasted $10 million in Q2 contract preparation expenses.
- Operating expenses increased 4.6% versus Q4, partly from higher depreciation following recent rig acquisitions and elevated rig OpEx related to the credit loss provision.
- Despite operational and geopolitical headwinds, full-year 2026 contract coverage improved to 71% at an average $137,000 dayrate, supported by new contract wins and fleet expansion through acquisition.
Borr Drilling Limited reported a robust Q3 2025, with a revenue increase of $9.4 million quarter-over-quarter and adjusted EBITDA growth to $135.6 million, while maintaining high utilization rates across its fleet.
Key takeaways
- Revenue growth driven by increased day rates and bareboat chartering, with total operating revenues at $158.3 million.
- Adjusted EBITDA margin remains strong at 48.9%, reflecting high operational efficiency.
- Significant liquidity position with $461.8 million available, including $227.8 million in free cash.
- Secured three contract extensions in Mexico, enhancing visibility into 2026 and beyond.
- Optimistic outlook for Q4 2025 despite near-term transition impacts, with full-year adjusted EBITDA projected between $455 million and $470 million.
Borr Drilling reported robust second quarter results, marked by a 24% increase in revenues to $267.7 million and an impressive EBITDA growth of 39% to $133 million, driven by high rig utilization and strong demand.
Key takeaways
- Technical utilization reached 99.6%, with 22 out of 24 rigs active during the quarter.
- Secured significant contract wins, enhancing contract coverage to 84% for 2025 at an average day rate of $145,000.
- Successfully increased liquidity by $200 million through a comprehensive financing package, including a $102.5 million equity raise.
- Generated $106.5 million in free cash flow year-to-date, reflecting continued operational strength and financial discipline.
- Positive outlook for third quarter performance, aligning with current market conditions and government-backed initiatives in Mexico.