Offshore drillship operator Seadrill Ltd. reported its 1Q 2016 results today. Key takeaways of the release are as follows:
- Revenues for the first quarter of 2016 were $891m, a 28% decline as compared to previous year’s revenues of $1.2bn. The decline in revenues was attributed to lower day rates on its fleet which failed to offset higher fleet utilization during the quarter of 97%.
- EBITDA for 1Q 2016 was $528m, a 26% decline vs. $715m in 1Q 2015, translating into an EBITDA margin of 59% vs. 57% previously.
- Net Debt for 1Q 2016 decreased to $9.6bn from $11.4bn in March 2015.
- Cash flow from operating activities for 1Q 2016 declined to $294m from $499m a year ago.
- Seadrill, as part of its broader plan to refinance and recapitalize its business, extended the nearest three maturing borrowing facilities and amended certain covenants across all its secured debt.
- Seadrill agreed not to draw on any of the $467m available to it under its revolving credit facilities as part of negotiations with lenders and agreed to increase its minimum liquidity covenant contained in its secured credit facilities from $150m to $250m.
- The company deferred delivery on its new vessels; 2 ultra-water drillships, West Aquila and West Libra deferred until 2Q’18 and 1Q’19 respectively and 5 jack-ups deferred until 2017 and 3 until 2018.
For 2Q 2016, EBITDA is expected to be around $510m in anticipation of lower day-rates on certain vessels (West Tellus, Sevan Brasil & West Cressida) and on contract culmination for West Prospero, West Castor and West Hercules which offsets commencement of operation or higher utilization on vessels West Eclipse & West Phoenix
For FY 2016, the company expects to achieve cash cost savings of about $340m, of which $305m would be attributed to sustainable cost savings, and $35m toward deferred spending.
Source: Company Press Release