Seadrill(US:SDRL)2025-05-12 20:00Financial Performance - Operating revenues for the three months ended March 31, 2025, were $335 million, down 9% from $367 million in the same period of 2024 [91]. - The total operating profit for Q1 2025 was $18 million, a significant decrease of 78% compared to $80 million in Q1 2024 [91]. - Net loss for the three months ended March 31, 2025, was $14 million, compared to a net income of $60 million in the same period of 2024, marking a 123% decline [91]. - Total operating expenses for Q1 2025 were $317 million, an increase of 5% compared to $303 million in Q1 2024 [112]. - Other financial items increased by $8 million in Q1 2025, primarily due to a provision recognized related to assets sold in 2023 [127]. - The income tax expense increased by $5 million in Q1 2025, primarily due to the recognition of a deferred tax benefit in Q1 2024 [129]. Revenue Sources - The average contractual dayrate increased to $323 thousand in Q1 2025 from $300 thousand in Q1 2024, contributing an additional $26 million to contract revenues [99]. - Economic utilization for rigs on contract dropped to 84% in Q1 2025 from 97% in Q1 2024, resulting in a $22 million decrease in contract revenues [102]. - Management contract revenues increased by $3 million in Q1 2025, driven by higher management fees on three managed rigs [107]. - Leasing revenues decreased by $3 million in Q1 2025 due to the disposal of Gulfdrill rigs in June 2024, despite higher charter rates for the West Gemini [110]. Cash Flow and Liquidity - Net cash used in operating activities was $27 million in Q1 2025, a decrease of $56 million compared to net cash provided of $29 million in Q1 2024 [141]. - Available liquidity as of March 31, 2025, was $629 million, consisting of $404 million in unrestricted cash and $225 million in available borrowings [137]. - $49 million cash used in investing activities for Q1 2025 primarily for capital expenditures on West Neptune, West Elara, and West Auriga [142]. - $119 million cash used in financing activities for Q1 2024 related to share repurchases [143]. Debt and Financing - Total debt as of March 31, 2025, is $625 million, with a carrying value of $611 million [144]. - The company entered into a $225 million, 5-year Senior Secured Revolving Credit Agreement in July 2023 [145]. - $575 million notes issued in July 2023, maturing on August 1, 2030, secured by a second priority lien [146]. - The company has $208 million remaining under the $500 million share repurchase program as of March 31, 2025 [133]. Market Conditions - The average Brent oil price for the three months ended March 31, 2025, was $76 per barrel, down from $80 per barrel in 2024 [85]. - The company is exposed to market risks, including foreign exchange and interest rate risks, with no material changes reported as of March 31, 2025 [151]. Compliance and Accounting - As of March 31, 2025, the company was in compliance with financial covenants, including an Interest Coverage Ratio of at least 2.50 to 1.00 [148][152]. - The company made critical accounting estimates affecting reported amounts of assets, liabilities, revenues, and expenses [149]. - There have been no material changes to the judgments, assumptions, and estimates upon which critical accounting policies are based as of March 31, 2025 [150]. Contract Backlog and Rig Utilization - As of March 31, 2025, the total contract backlog was $2,914 million, a decrease from $3,180 million as of December 31, 2024, representing a decline of 8.3% [80]. - The average number of rigs on contract decreased from 10 in Q1 2024 to 9 in Q1 2025, leading to a $42 million decrease in contract revenues [96]. - Vessel and rig operating expenses remained consistent at $179 million in Q1 2025, with a decrease of $33 million attributed to lower managed service agreement fees [114]. - Depreciation and amortization increased by $17 million to $55 million in Q1 2025, primarily due to capital projects on the West Auriga and West Polaris [115]. - Interest income decreased by $3 million to $4 million in Q1 2025, primarily due to a decrease in cash and cash equivalents [125].