HAMILTON, Bermuda, Aug. 28, 2020 /PRNewswire/ -- Borr Drilling Limited ("Borr", "Borr Drilling" or the "Company") (NYSE: "BORR", OSE: "BDRILL") announces unaudited results for the three and six months ended June 30, 2020.
Highlights in the Second Quarter of 2020
The Chairman of the Board, Paal Kibsgaard, commented:
"In the second quarter, we saw the full impact of the anticipated activity reductions linked to COVID-19, resulting in a sequential decrease in operating revenues of 19% to $84.0 million, and Adjusted EBITDA of $(1.9) million. The adjusted EBITDA includes $12 million of non-recurring costs related to the agreements reached with the Company's creditors in June 2020.
In the current challenging operating environment, Borr Drilling has been focused on improving its liquidity runway and conserving cash. Through negotiations with creditors and shipyards in June, we improved the Company's liquidity by $315 million through the start of 2022, mainly through deferral of payments.
Operationally, the Mexican business has improved significantly quarter on quarter. The four JVs that the Company has ownership in delivered USD30m in Adjusted EBITDA in the quarter. Additionally, we estimate that COVID-19 impacted our Mexican JVs directly by $5.5 million in lost revenue and additional expenses combined. The wells delivered by Borr's integrated services have, based on Pemex's Q2 2020 report, increased Pemex production by 72k barrels/day. With the quick payback and low breakeven for the customer we expect the integrated well delivery business model to gain further traction going forward.
From a liquidity perspective, the operations of our Mexican JVs have suffered from irregular payments and difficulties with factoring of receivables, which in turn has put further strain on the Company's liquidity position. However, in late August 2020, Pemex confirmed their commitment to enter into a regular monthly payment plan to our JVs, which will reduce the working capital requirements and allow cash distributions from the JVs to Borr, and thereby improve Borr's liquidity position.
The improvement in oil prices during the spring of 2020 triggered demand for putting three of our warm stacked units back to work. This shows the resilience of the shallow water offshore drilling market and, as oil prices continue to improve, we expect to put further units back to work in the future.
The distress in the offshore drilling industry is likely to force both needed consolidation and fleet rationalisation going forward. Borr Drilling has a brand-new jack-up drilling rig fleet and is well positioned to participate in such consolidation if it benefits our shareholders."
The full report and financial statements is available in the enclosed file to this release.
August 28, 2020
The Board of Directors
Borr Drilling Limited
Questions should be directed to:
Magnus Vaaler: VP Investor Relations and Treasury, +47 22 48 30 00
This information is subject to disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
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The following files are available for download:
2nd Quarter 2020 Results
SOURCE Borr Drilling Limited