Transocean Ltd. Reports Second Quarter 2024 Results
Transocean Ltd. (NYSE: RIG) today reported a net loss attributable to controlling interest of $123 million, $0.15 per diluted share, for the three months ended June 30, 2024. Second quarter results included certain favorable and unfavorable items, that were offsetting
| Three months ended | Three months ended | ||||||||||||||||||
| June 30, | March 31, | sequential | June 30, | year-over-year | |||||||||||||||
| 2024 | 2024 | change | 2023 | change | |||||||||||||||
| (In millions, except per share amounts, percentages and backlog) | |||||||||||||||||||
| Contract drilling revenues | $ | 861 | $ | 763 | $ | 98 | $ | 729 | $ | 132 | |||||||||
| Adjusted contract drilling revenues | $ | 861 | $ | 767 | $ | 94 | $ | 748 | $ | 113 | |||||||||
| Revenue efficiency (1) | 96.9 | % | 92.9 | % | 4.0 | % | 97.2 | % | (0.3 | )% | |||||||||
| Operating and maintenance expense | $ | 534 | $ | 523 | $ | 11 | $ | 484 | $ | 50 | |||||||||
| Net income (loss) attributable to controlling interest | $ | (123 | ) | $ | 98 | $ | (221 | ) | $ | (165 | ) | $ | 42 | ||||||
| Diluted earnings (loss) per share | $ | (0.15 | ) | $ | 0.11 | $ | (0.26 | ) | $ | (0.22 | ) | $ | 0.07 | ||||||
| Adjusted EBITDA | $ | 284 | $ | 199 | $ | 85 | $ | 237 | $ | 47 | |||||||||
| Adjusted EBITDA margin | 33.0 | % | 26.0 | % | 7.0 | % | 31.7 | % | 1.3 | % | |||||||||
| Adjusted net loss | $ | (123 | ) | $ | (22 | ) | $ | (101 | ) | $ | (110 | ) | $ | (13 | ) | ||||
| Adjusted diluted loss per share | $ | (0.15 | ) | $ | (0.03 | ) | $ | (0.12 | ) | $ | (0.15 | ) | $ | — | |||||
| Backlog as of the July 2024 Fleet Status Report | $ | 8.64 billion | |||||||||||||||||
Contract drilling revenues for the three months ended June 30, 2024, increased sequentially by $98 million to $861 million, primarily due to increased rig utilization and higher revenue efficiency across the fleet. This was partially offset by lower reimbursable revenue and lower revenues resulting from the sale of Paul B. Loyd, Jr.
Operating and maintenance expense was $534 million, compared with $523 million in the prior quarter. The sequential increase was primarily due to rigs returning to work after undergoing contract preparation in the first quarter and increased costs associated with the early retirement of certain personnel. This was partially offset by lower reimbursed expenses and lower operating costs resulting from the sale of Paul B. Loyd, Jr.
General and administrative expense was $59 million, up from $52 million in the first quarter. The increase was primarily due to costs associated with the early retirement of certain personnel and professional fees.
After consideration of the favorable adjustment of $69 million and $10 million in the second and first 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 $143 million, compared to $127 million in the prior quarter. Interest income was $14 million, compared to $15 million in the previous quarter.
The Effective Tax Rate(2) was 474.5%, up from 206.0% in the prior quarter. The increase was primarily due to increased income before tax. The Effective Tax Rate excluding discrete items was 416.3% compared to 76.9% in the previous quarter.
Cash provided by operating activities was $133 million during the second quarter of 2024, representing an increase of $219 million compared to $86 million cash used in operating activities in the prior quarter. The sequential increase was primarily due to timing of interest payments, decreased payments for payroll-related costs and increased cash collected from customers.
Second quarter 2024 capital expenditures of $84 million were primarily associated with the newbuild ultra-deepwater drillship Deepwater Aquila. This compares with $83 million in the prior quarter.
“The entire Transocean team executed well in the second quarter, delivering strong uptime performance for our customers, which drove revenue efficiency to 97% and produced 33% Adjusted EBITDA margins,” said Chief Executive Officer, Jeremy Thigpen. “In addition, the team recently secured a number of meaningful contracts, which are illustrative of current industry dynamics and reinforce our view that we are in an increasingly tightening market. Of these contracts, we are especially excited to continue 20K operations with Beacon in the U.S. Gulf of Mexico.”
Thigpen concluded, “As we continue to secure work for our fleet, our focus remains on optimizing our portfolio of assets to maximize EBITDA and generate free cash flows, which we can use to de-lever the balance sheet.”
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