Borr Drilling Limited (the "Company") (NYSE: BORR) (OSE: BORR) announced certain preliminary unaudited results for the quarter ended September 30, 2024.
For the three months ended September 30, 2024, the Company expects: (i) total operating revenues of approximately $242 million, (ii) operating income of approximately $84 million, and (iii) Adjusted EBITDA of approximately $116 million. The Company expects approximately $186 million in cash and cash equivalents and $150.0 million undrawn under our revolving credit facility as of September 30, 2024.
The decrease in operating income of approximately $21 million compared to the second quarter of 2024 is primarily comprised of the following: (i) $13 million decrease associated with a one-off net impact in Q2 2024 from the amortization of deferred revenue and deferred costs related to the termination of a contract for "Arabia I"; and (ii) $11 million decrease in related party revenue associated with three rigs in Mexico, due to the one-time recognition of accelerated amortization of deferred revenue in Q2 2024 as a result of the amendments made to the Mexico structure effective April 1, 2024.
Furthermore, the Company expects FY 2024 adjusted EBITDA at or around the lower end of the previously disclosed guiding range of $500 - $550 million.
For illustrative purposes, the Company expects the following future positive impacts to adjusted EBITDA on an annualized basis:
- $39 million on an annualised basis from the increases in contracted dayrates for rigs operating in Q3 2024 (Norve, Gerd, Natt) with expected dayrates uplift in Q4 2024 compared to Q3 2024, including the impact of off-contract time in Q3 2024;; and
- $143 million on an annualised basis from the expected contract start-up of four rigs in Q4 2024/Q1 2025, reflecting expected impact of (i) expected contract for Vale, expected to commence in early Q1 2025 ($56m expected annualized impact), (ii) Arabia I contract commencing in Q1 2025, and (iii) Prospector 1 and Gunnlod contracts commencing in Q4 2024; includes impact of off-contract time in Q3 2024
These positive impacts may be offset by less contribution from rigs operating in Q3 2024 whose contracts expire in the near future (Thor and Ran) which remain to be contracted. The impact these rigs had on the Q3 2024 EBITDA was approximately $11 million3.
The Company is currently finalizing its financial results for the three and nine months ended September 30, 2024, which it plans to release on November 6, 2024 after markets close.
The expected financial results for the three months ended September 30, 2024 presented herein are estimates, based on information available to management as of the date of this release, and are subject to further changes upon completion of the Company's standard quarter end closing procedures. Such preliminary operating results do not represent a comprehensive statement of financial results or financial position, and actual results may differ materially from these estimates following the completion of Borr Drilling's standard closing procedures, or as a result of other adjustments or developments that may arise before the results for this period are finalized. The Company does not intend to update such financial information prior to release of its final third quarter 2024 financial information, which is scheduled for November 6, 2024.
