Transocean Ltd. Reports First Quarter 2024 Results
17:24:00 PM ET, 04/29/2024 - GlobeNewswire
Three months ended March 31, 2024 December 31,2023 Sequential change
(In millions, except per share amounts and backlog)
Contract drilling revenues $763 $741 $22
Adjusted contract drilling revenues $767 $748 $19
Revenue efficiency(1) 92.9% 97.0% (4.1)%
Operating and maintenance expense $523 $569 $(46)
Net income (loss) attrib. to con. int. $98 $(104) $202
Diluted earnings (loss) per share $0.11 $(0.13) $0.24
Adjusted EBITDA $199 $122 $77
Adjusted EBITDA margin 26.0 % 16.3% 9.7%
Adjusted net loss $(22) $(74) $52
Adjusted diluted loss per share $(0.03) $(0.09) $0.06
Backlog as of the April 2024 Fleet Status Report $ 8.9 billion
STEINHAUSEN, Switzerland, April 29, 2024 (GLOBE NEWSWIRE) -- Transocean Ltd. (NYSE: RIG) today reported a net income attributable to controlling interest of $98 million, $0.11 per diluted share, for the three months ended March 31, 2024.
First quarter results included net favorable items of $120 million, $0.14 per diluted share, primarily due to $121 million discrete tax items, net.
After consideration of these net favorable items, first quarter 2024 adjusted net loss was $22 million, $0.03 per diluted share.
Contract drilling revenues for the three months ended March 31, 2024, increased sequentially by $22 million to $763 million, primarily due to increased activity for rigs that returned to work or were fully active this quarter after undergoing contract preparation, higher dayrate and higher reimbursable revenue. This was partially offset by lower revenue efficiency across the fleet, particularly on Deepwater Titan which experienced significant unscheduled downtime related to its blowout preventer, and one less day in the quarter. Deepwater Titan has since resumed dayrate operations.
Contract intangible amortization represented a non-cash revenue reduction of $4 million, compared to $7 million in the prior quarter. The contract intangible assets are now fully amortized.
Operating and maintenance expense was $523 million, compared with $569 million in the prior quarter. The sequential decrease was primarily due to cost savings on rigs that were idle in the first quarter, reduced contract preparation expenses, and lower in-service maintenance cost on the operating fleet. This was partially offset by higher reimbursed expenses.
After consideration of the favorable adjustment of $10 million and $145 million in the first and fourth quarter, respectively, for the fair value of the bifurcated exchange feature related to the 4.625% exchangeable bonds, interest expense net of capitalized amounts was $127 million, compared to $142 million in the prior period. Interest income was $15 million, compared to $10 million in the previous quarter.
The Effective Tax Rate(2) was 206.0%, up from (25.0)% in the prior quarter. The increase was primarily due to changes in deferred taxes related to rig ownership changes, rig movement and contract expirations across multiple jurisdictions. The Effective Tax Rate excluding discrete items was 76.9% compared to (30.0)% in the previous quarter.
Cash used in operating activities was $86 million during the first quarter of 2024, representing a decrease of $184 million compared to cash provided by operations in the prior quarter. The sequential decrease was primarily due to increased payments that regularly occur in the first quarter of each year for payroll-related costs and interest expense.
First quarter 2024 capital expenditures of $83 million were primarily associated with the newbuild ultra-deepwater drillship Deepwater Aquila. This compares with $220 million in the prior quarter.
“Over the first months of 2024, Transocean has achieved some fairly significant milestones. First, we secured a 365-day extension on Deepwater Asgard at a rate of $505,000 per day, once again demonstrating the sustained tightness in the high-specification floater market as well as Transocean’s ability to command industry-leading dayrates,” said Chief Executive Officer Jeremy Thigpen. “Additionally, earlier this month we finalized a $1.8 billion debt refinancing transaction, enabling us to improve near-term liquidity and start the process of simplifying our balance sheet. We also completed the extension of our revolving credit facility to mid-2028, further enhancing our financial flexibility.”
Thigpen concluded, “Looking ahead, we remain encouraged by the demand outlook and expect to see numerous long-term contracts awarded over the next several months. As we work to secure those contracts, we will remain acutely focused on operational execution across our fleet, as we endeavor to maximize the conversion of our industry-leading backlog to cash.”
