Borr Drilling Limited Q2 FY2025 earnings call

• Second quarter results were strong with 99.6% technical utilization and 97.8% economic utilization. Revenue increased by $51.1 million, EBITDA by $37 million to $133 million. $106.5 million free cash flow in the first 6 months.
• Secured significant new awards including a multi-rig contract in Asia and a new contract for Arabia II. Contract coverage at 84% for 2025 and 47% for 2026.
• In July, a comprehensive financing package was implemented, including a $102.5 million equity raise and amendments to credit facilities, increasing liquidity by $200 million.
• Anticipate comparable activity in the third quarter to the second quarter. Comfortable with Bloomberg consensus estimate of approximately $470 million for 2025 adjusted EBITDA.
• Mexican government's commitment to strengthening Pemex's liquidity and production goals to enhance Borr Drilling's liquidity.

Total operating revenues for the second quarter were $267.7 million, an increase of $51.1 million or 24% compared to the first quarter. Day rate revenues increased by $36.3 million, bareboat charter revenues by $12.7 million, and management contract revenue by $2.1 million. Total operating expenses were $171.2 million, an increase of $14.4 million or 9% compared to the first quarter. Operating income was $96.5 million, a $36.3 million or 60% increase from the prior quarter. Adjusted EBITDA was $133.2 million, an increase of $37.1 million or 39%. The first 6 months of the year generated $106.5 million free cash flow. At the end of Q2, the free cash position was $92.4 million with $150 million undrawn under the revolving credit facility, resulting in total available liquidity of $242.4 million.

• Third quarter activity expected to be comparable to the second quarter.
• Comfortable with Bloomberg consensus estimate of approximately $470 million for 2025 adjusted EBITDA.
• Pro forma liquidity after the financing package is approximately $425 million.

• Market conditions and regional conflicts could impact results.
• Excess capacity in the jack-up market causing downward pressure on day rates.
• Delays in projects due to supply chain constraints and procurement processes.

Q: Update on Mexico status and confidence in extensions for jack-ups?

A: Bruno Morand talks about positive government announcements and ongoing discussions for extensions.

Q: Potential M&A and opportunistic transactions?

A: Bruno Morand mentions looking for consolidation opportunities but can't provide detailed commentary.

Q: Private investment projects in Mexico?

A: Bruno Morand discusses private projects in Mexico and their potential.

Q: Pemex receivables and payments?

A: Magnus Vaaler talks about recent signals and actions indicating payments will pick up.

Q: Saudi rig demand and market commentary?

A: Bruno Morand discusses Aramco's potential rig needs and market developments.

Q: 2026 coverage and utilization vs day rates?

A: Bruno Morand states focus on optimizing utilization.

Q: Natt rig swap and options?

A: Bruno Morand talks about potential early work and optimization.

Q: Gas activity and exploration opportunities?

A: Bruno Morand discusses gas projects and exploration uptick.

Q: Mexico receivables timing and government communication?

A: Bruno Morand talks about positive indications but no direct communication.

Q: Equity raise and debt opportunistically?

A: Patrick Schorn mentions considering debt buybacks and strategic opportunities.