Q4 2023 Earnings Summary
Reported on Jan 9, 2025 (Before Market Open)
Pre-Earnings Price$6.45Last close (Feb 21, 2024)
Post-Earnings Price$6.50Open (Feb 22, 2024)
Price Change
$0.05(+0.78%)
- Borr Drilling is well-positioned to achieve or exceed its 2024 adjusted EBITDA guidance of $500 million to $550 million, with 87% fleet coverage already secured and ongoing discussions to fill remaining capacity at higher day rates over $150,000 per day, potentially increasing earnings towards the upper end of the guidance range.
- The upcoming deployment of newbuild rigs, which are among the most capable in their fleet and have attracted substantial customer interest for long-term contracts, positions Borr Drilling for future revenue growth and increased earnings in 2025 and beyond.
- Borr Drilling's commitment to returning value to shareholders, evidenced by consecutive quarterly dividends of $0.05 with expectations to increase dividends over time, demonstrates a strong financial position and confidence in future cash flows, making the stock attractive to investors.
- There is uncertainty regarding the future employment of the Prospector 1 rig in the North Sea. Borr Drilling's management indicated that the North Sea is not a key market for them, and while discussions are ongoing, relocating the rig could incur additional costs and inefficiencies.
- Significant cash flow growth is expected in 2025 rather than 2024, indicating limited cash flow increase in the near term. Management noted that the "real kicker on cash flow is coming in 2025 and beyond," which may affect shareholder returns in the near term.
- Leading edge day rates have been flat at around $165,000 to $170,000 per day for the last six months. This plateau could limit revenue growth if day rates do not increase further.