Noble plc(NE) - 2024 Q3 - Quarterly Results

Noble Corporation plc Announces Third Quarter 2024 Results Noble Corporation plc announced its third-quarter 2024 results, highlighting strong financial performance, strategic acquisitions, and significant capital returns to shareholders Third Quarter 2024 Highlights Noble Corporation reported Q3 2024 net income of $61 million and Adjusted EBITDA of $291 million, driven by the Diamond acquisition, increased share repurchase authorization, and a declared $0.50 per share dividend for Q4 Financial Metric (Millions USD, except EPS) | Financial Metric | Q3 2024 (USD) | Q3 2023 (USD) | Q2 2024 (USD) | | :--- | :--- | :--- | :--- | | Total Revenue | $801M | $697M | $693M | | Net Income | $61M | $158M | $195M | | Adjusted EBITDA | $291M | $283M | $271M | | Diluted EPS | $0.40 | $1.09 | $1.34 | | Adjusted Diluted EPS | $0.58 | $0.87 | $0.72 | - Closed the acquisition of Diamond Offshore Drilling, Inc. on September 4, 2024[1][2] - The capital return program was increased with an additional share repurchase authorization of $400 million[1][6] - A dividend of $0.50 per share was declared for Q4 2024, bringing total expected cash returns to shareholders in FY 2024 to over $525 million[1][7] Q4 2024 Guidance (Millions USD) | Q4 2024 Guidance | Range (Millions USD) | | :--- | :--- | | Total Revenue | $850M - $890M | | Adjusted EBITDA | $275M - $305M | | Capital Additions (net) | $105M - $135M | Third Quarter Financial Performance Q3 2024 contract drilling services revenue increased to $764 million, primarily due to the Diamond fleet acquisition, while net income decreased to $61 million despite rising Adjusted EBITDA and free cash flow - The sequential increase in contract drilling services revenue was primarily driven by approximately four weeks of contribution from the legacy Diamond fleet[3] Metric (Millions USD) | Metric | Q3 2024 (Millions USD) | Q2 2024 (Millions USD) | | :--- | :--- | :--- | | Contract Drilling Services Revenue | $764M | $661M | | Contract Drilling Services Costs | $434M | $336M | | Net Income | $61M | $195M | | Adjusted EBITDA | $291M | $271M | | Free Cash Flow | $165M | N/A | - Marketed fleet utilization improved to 82% in Q3 2024 from 78% in the previous quarter[3][4] Balance Sheet and Shareholder Returns As of September 30, 2024, Noble maintained a total debt principal of $2.0 billion and $392 million in cash, while actively returning capital through $250 million in share repurchases and a $0.50 per share Q4 dividend Balance Sheet Item (as of Sep 30, 2024) | Balance Sheet Item | Amount (as of Sep 30, 2024) | | :--- | :--- | | Total Debt Principal | ~$2.0 billion | | Cash and Cash Equivalents | $392 million | - Repurchased approximately 6.9 million shares for $250 million in Q3 2024[6] - The Board of Directors authorized an additional $400 million for share repurchases[6] - A quarterly cash dividend of $0.50 per share for Q4 2024 was approved, payable on December 19, 2024[7] Operating Highlights and Outlook The company's operational performance improved with increased utilization and strong dayrates, supported by a growing backlog and positive future outlook Operating Highlights and Backlog Q3 utilization improved across floaters and jackups, with strong tier-1 drillship dayrates and a significant 4.8-year backlog extension from ExxonMobil Guyana, increasing total backlog to $6.2 billion Average Rig Utilization | Fleet Segment | Q3 2024 Utilization (%) | Q2 2024 Utilization (%) | Q3 2023 Utilization (%) | | :--- | :--- | :--- | :--- | | Floaters | 81% | 78% | 77% | | Jackups | 83% | 77% | 64% | | Total | 76% | 73% | 72% | - Leading edge dayrates for tier-1 drillships remain in the mid $400,000s to low $500,000s per day[8] - ExxonMobil Guyana awarded an additional 4.8 years of backlog, extending contracts for four drillships from Q2 2027 to Q3 2028[10] - The company's total contract backlog stood at $6.2 billion as of November 5, 2024[10] Company Outlook Noble projects Q4 2024 revenue between $850-$890 million and Adjusted EBITDA between $275-$305 million, anticipating future backlog growth and reaffirming its commitment to shareholder returns Q4 2024 Guidance (Millions USD) | Q4 2024 Guidance | Range (Millions USD) | | :--- | :--- | | Total Revenue | $850M - $890M | | Adjusted EBITDA | $275M - $305M | | Capital Additions (net) | $105M - $135M | - Management anticipates a backlog inflection sometime next year, driven by a strong commercial pipeline[12] - The company remains committed to returning essentially all free cash flow to shareholders, highlighted by a second $400 million share repurchase authorization[12] Consolidated Financial Statements This section presents Noble's condensed consolidated financial statements, including statements of operations, balance sheets, and cash flows, reflecting the impact of the Diamond acquisition Condensed Consolidated Statements of Operations Q3 2024 total operating revenues increased to $800.5 million, but operating income decreased to $115.5 million due to higher costs, resulting in net income of $61.2 million Condensed Consolidated Statements of Operations (in thousands USD) | (in thousands) | Three Months Ended Sep 30, 2024 (USD) | Three Months Ended Sep 30, 2023 (USD) | | :--- | :--- | :--- | | Total Operating Revenues | $800,549 | $697,450 | | Operating Income | $115,483 | $200,776 | | Net Income | $61,216 | $158,323 | | Diluted EPS | $0.40 | $1.09 | Condensed Consolidated Balance Sheets As of September 30, 2024, total assets significantly increased to $8.04 billion, primarily due to the Diamond acquisition, with corresponding increases in total liabilities and shareholders' equity Condensed Consolidated Balance Sheets (in thousands USD) | (in thousands) | September 30, 2024 (USD) | December 31, 2023 (USD) | | :--- | :--- | :--- | | Total Current Assets | $1,410,691 | $1,061,748 | | Property and Equipment, net | $6,049,437 | $4,124,336 | | Total Assets | $8,035,144 | $5,507,437 | | Long-term Debt | $1,981,237 | $586,203 | | Total Liabilities | $3,350,195 | $1,586,197 | | Total Shareholders' Equity | $4,684,949 | $3,921,240 | Condensed Consolidated Statements of Cash Flows For the nine months ended September 30, 2024, net cash from operating activities significantly increased to $519.3 million, while investing activities used $813.8 million, and financing activities provided $331.9 million Condensed Consolidated Statements of Cash Flows (in thousands USD) | (in thousands) | Nine Months Ended Sep 30, 2024 (USD) | Nine Months Ended Sep 30, 2023 (USD) | | :--- | :--- | :--- | | Net Cash from Operating Activities | $519,261 | $286,848 | | Net Cash from Investing Activities | ($813,800) | ($268,131) | | Net Cash from Financing Activities | $331,887 | ($254,847) | | Net Increase (Decrease) in Cash | $37,348 | ($236,130) | Supplemental Information This section provides detailed operational metrics, reconciliations of non-GAAP financial measures, and selected unaudited financials for Noble Offshore Drilling, Inc Operational Information Q3 2024 operational metrics show total average rig utilization increased to 76% and average dayrates for the total fleet rose to $315,295 Average Rig Utilization | Average Rig Utilization | Q3 2024 (%) | Q2 2024 (%) | Q3 2023 (%) | | :--- | :--- | :--- | :--- | | Floaters | 72% | 70% | 77% | | Jackups | 83% | 77% | 64% | | Total | 76% | 73% | 72% | Average Dayrates (USD) | Average Dayrates (USD) | Q3 2024 | Q2 2024 | Q3 2023 | | :--- | :--- | :--- | :--- | | Floaters | $424,199 | $435,677 | $403,813 | | Jackups | $159,444 | $155,585 | $140,775 | | Total | $315,295 | $310,962 | $304,040 | Non-GAAP Measures and Reconciliation This section reconciles GAAP to non-GAAP financial measures, showing Q3 2024 Net Income of $61.2 million reconciled to Adjusted EBITDA of $290.8 million and Free Cash Flow of $164.7 million Reconciliation to Adjusted EBITDA (Q3 2024, in thousands USD) | Reconciliation to Adjusted EBITDA (Q3 2024, in thousands USD) | Amount | | :--- | :--- | | Net Income | $61,216 | | D&A | $109,879 | | Merger and integration costs | $69,214 | | Other adjustments | $50,537 | | Adjusted EBITDA | $290,846 | Reconciliation to Free Cash Flow (Q3 2024, in thousands USD) | Reconciliation to Free Cash Flow (Q3 2024, in thousands USD) | Amount | | :--- | :--- | | Net cash provided by operating activities | $283,781 | | Capital expenditures, net | ($119,104) | | Free cash flow | $164,677 | Noble Offshore Drilling, Inc. Unaudited Selected Financials Unaudited selected financials for Noble Offshore Drilling, Inc. are provided to satisfy a covenant, showing total debt of $1.17 billion and total shareholder's equity of $864.4 million as of September 30, 2024 - This financial information is furnished to holders of the Diamond Second Lien Notes as required by an indenture covenant following the merger[47] Balance Sheet (Sep 30, 2024, in thousands USD) | Balance Sheet (Sep 30, 2024, in thousands USD) | Amount | | :--- | :--- | | Cash and cash equivalents | $179,801 | | Total debt | $1,171,316 | | Total shareholder's equity | $864,444 |