Hamilton, Bermuda, November 26, 2019: Borr Drilling Limited (“Borr”, “Borr Drilling” or the “Company”) announces unaudited results for the three and nine months ending September 30, 2019.
The Chairman of the Board, Paal Kibsgaard, commented: “The jack-up market tightened further in the third quarter, with strong tendering activity, improving dayrates and a strengthening market outlook for 2020. We continued to execute well throughout our rig operations, as well as on our rig activation program. Over the past two years, we have brought 16 rigs into operation, with an additional three rigs presently committed to commence work. With a further 12 modern rigs left to be contracted, of which 7 are still to be delivered, we are in a strong market position, both in terms of capacity and the age profile of our fleet.
The third quarter financial results were in line with our expectations and continued to be impacted by significant rig activation capex. Still, we are pleased to report that operating cash-flow now covers the full SG&A, stacking cost and the servicing of our debt. We have approached our lending banks, seeking an adjustment of the book equity and liquidity covenants, and also the yard, to potentially delay delivery schedules for some of the remaining rigs. We are optimistic that agreements will be reached in the near future. This will further strengthen the company’s liquidity and provide considerable financial flexibility for further rig activations. Based on the current dayrates of around $100k/day, and operating expenses of around $50k/day, we aim to generate around $500 million per year in gross cashflow before interest when all of our rigs are employed. This clearly shows the cashflow potential for Borr in the coming years, which the Company is fully focused on realising.”
Highlights in the third quarter 2019
• Total operating revenues of $102.7 million, net loss of $79.2 million and Adjusted EBITDA of $13.8 million for the third quarter of 2019 vs $1.5 million in the second quarter of 2019
• Technical utilisation for the operating rigs was 99.1% in the third quarter and 99.0% for the first nine months of 2019
• Economical utilisation for the operating rigs was 95.2% in the third quarter and 95.3% for the first nine months of 2019
• Company completed an initial public offering on the New York Stock Exchange under the ticker BORR, issuing 5,750,000 shares at a price of $9.30 per share
• Commenced two 18-month contracts for two premium newbuild jack-up rigs with Pemex in Mexico in August 2019, under an integrated services model, bringing the total number of rigs in operation to 16
• In October, Paal Kibsgaard, the former Chairman and CEO of Schlumberger, was appointed as the new Chairman of the Board, replacing Tor Olav Trøim, who continues to serve on the Board as Deputy Chairman. Mr Kibsgaard will in his initial year, serve as executive Chairman, focused on strengthening the Company’s organization, operating processes and its integrated service offering.
• Since the previous quarterly results release in August 2019, the Company has been awarded contracts, LOAs and extensions for 6 rigs with a combined revenue backlog of approximately $169 million. Total additional backlog added year to date of approximately $465 million
• In October, the company took delivery of the new build jack-up rig “Hermod” from the Keppel FELS shipyard in Singapore
• In November 2019, the Company sold marketable securities, resulting an estimated total realised loss of $16.4 million, and improving the liquidity position by $20.2 million
The full report is available in the enclosed file
November 26, 2019
The Board of Directors
Borr Drilling Limited
Questions should be directed to:
Svend Anton Maier: Chief Executive Officer, Borr Drilling Management, +47 41427129
Rune Magnus Lundetræ: Chief Financial Officer, Borr Drilling Management, +47 90088411
Forward looking statements
This announcement includes forward looking statements. Forward looking statements are, typically, statements that do not reflect historical facts and may be identified by words such as “anticipate”, “believe”, “continue”, “estimate”, “expect”, “intends”, “may”, “should”, “will” and similar expressions and include expectations regarding industry trends including activity levels in the jack-up rig industry, expectations as to global jack-up rig count and expected tenders and demand levels, strategy with respect to deployment of rigs, expectations on trends and potential in day rates and potential to generate significant cash at current day rates, delivery of newbuilds including expected delivery timing, expected ability to sell or finance currently unencumbered rigs and expected valuation, strategy and plans with respect to investments in third party securities, contract backlog, expected contracting and operation of our jack-up rigs and contract terms included estimated duration of contracts, expectations with respect to contracting available rigs including warm stocked rigs, expected ability to generate cash from operations, expected completion of sales of rigs the Company has agreed to sell, expected results in the rest of 2019, including expected strong growth in Adjusted EBITDA in coming quarters and expectation Adjusted EBITDA will cover operational and finance costs, strategy with respect to asset base, expected business environment including statements made under “Market” and “Outlook” above, expected funding needs and ability to meet obligations for newbuilds, expected increase in tenders for jack-up rigs, global jack-up rig count, increase in demand from IOCs and NOCs, increases in oil production by geography, expected returns for oil companies, ability to fix rig rates at current market prices, competitive advantages from joint ventures, generation of free cash flow, improvement of cash flow per rig in operation post activation, remediation of advances, expected activation costs of rigs, expectations about our ability to find contracts for and activate our rigs not currently in operation, expectations with respect to amendments to our loan facility, expected industry trends including with respect to demand for and expected utilization of rigs, and other non-historical statements. The forward-looking statements in this announcement are based upon various assumptions, many of which are based, in turn, upon further assumptions, which are, by their nature, uncertain and subject to significant known and unknown risks, contingencies and other factors which are difficult or impossible to predict and which are beyond our control. Such risks, uncertainties, contingencies and other factors could cause actual events to differ materially from the expectations expressed or implied by the forward-looking statements included herein. In addition to the important factors and matters discussed elsewhere in this report, important factors that, in our view could cause actual results to differ materially from those discussed in the forward looking statements are included in our most recent annual report and in the section entitled “Risk Factors” in our filings with the Securities and Exchange Commission.