OSLO, Norway, May 20, 2020 /PRNewswire/ -- Hamilton, Bermuda, May 20, 2020: Borr Drilling Limited ("Borr", "Borr Drilling", "we" or the "Company") (NYSE: BORR, OSE: BDRILL) announces a trading update, including a limited financial analysis of the three months ended March 31, 2020.
This trading update given today is in lieu of the Company's usual quarterly report and includes the Company's Statement of Operations and a Balance Sheet for the first quarter 2020 as an appendix prepared in accordance with US GAAP.
The Chairman of the Board, Paal Kibsgaard, commented:
"I am pleased with the first quarter financial results, where we in spite of operational challenges linked to COVID-19, saw a sequential increase in operating revenues of 12% to $104.1 million, and Adjusted EBITDA reaching $25.4 million, an increase of $23.6 million compared to the fourth quarter 2019.
The first quarter financial performance was driven by "Saga", "Idun" and "Prospector 1", all generating revenue for a full three months, and by lower operating expenses, as our rig activation program continued to wind down, as well as lower G&A costs compared to the fourth quarter 2019.
In response to the COVID-19 pandemic, the Company has taken a range of operational and business continuity measures to protect the health and safety of our people, both onshore and offshore, and also to ensure that we can continue to serve our customers. With the weaker short-term outlook for oil prices and offshore activity, we have also implemented a company-wide cost reduction plan, to reduce annual operating and G&A expenses by a further $35 million.
The Company continues to work on improving cashflow and strengthening the balance sheet through tight control of both operating expenses and working capital. With 6 newly activated rigs unemployed due to reduced offshore activity, the liquidity required for rig classification and mobilization to secure new contracts is expected to be minimal.
The Company has, as a result of the weakened market, actively entered into discussions with the shipyards and creditors to create a liquidity runway until 2022 even in an unlikely low scenario without any further contracts. These discussions are showing material progress, and the board expects the process to be finalized in the near-term.
In April, the Company sold the "B152" and "Dhabi II" rigs for total proceeds of $15.8 million, and Borr continues to be involved in other tender processes which might lead to sale of some modern assets.
Looking at the total jack-up market, the number of contracted units have decreased from 387 to 371 units in the last 2 months, as a result of the COVID-19 pandemic, and we expect this number to reduce further. However, as global oil demand is anticipated to rebound in the coming year, we expect that some of the supply reductions and shut-ins will be slower to recover. This could lead to the development of a more constructive oil market over the course of 2021, and a subsequent improvement in offshore drilling."
Highlights in the first quarter 2020
In $ million
Q1 - 2020
Q4 - 2019
Total operating revenues
Operating revenues increased by 12% quarter on quarter to $104.1 million
The full Trading Update and the Fleet Status Report is available in the enclosed files
May 20, 2020
The Board of Directors
Borr Drilling Limited
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The following files are available for download:
Borr Q1 2020 Trading Update
Borr Drilling - Fleet Status Report May 2020
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