Archer Limited: Third quarter 2018 - Best quarterly operating result in 3 years
Hamilton, Bermuda (November 2, 2018)
Third Quarter 2018 earnings release highlights
- Best quarterly operating result in 3 years.
- Revenue of $213.7 million.
- EBITDA before exceptional items of $25.7 million, an increase of 45% from same quarter last year.
- EBITDA of $22.4 million, an increase of 75% from same quarter last year.
- EBIT of $8.6 million
- Divestment of US Onshore (AWC Frac Valves) for $30 million.
- All geographies and segments reported positive EBITDA, including within Land Drilling.
John Lechner, CEO Archer comments:
“Archer is pleased to deliver the strongest quarterly EBITDA margin reported since the third quarter of 2015. The bottom line performance is a result of an improved market in Eastern Hemisphere, as well as a strong operational delivery and lower cost base in Argentina.
In August we divested our US onshore business for an Enterprise value of $30 million. This divestment enables us to focus the company service portfolio and to de-leverage the company, while reducing the Net Interest Bearing Debt by approximately $30 million.
Our determined focus on performance improvement and restructuring of our Land Drilling business is finally paying dividends in the form of improved drilling performance coupled with a lower cost base. In isolation, the financial turmoil in Argentina has a negative effect on the top line revenue reported in US dollars, but a slight positive effect on our EBITDA margins. Furthermore, we have so far not seen any drop in activity levels as a result of the financial uncertainty. Although the operating environment in Argentina is somewhat unpredictable, we feel we have turned the tide in terms of delivering more consistent bottom line performance going forward.
On October 1st we successfully onboarded approximately 400 new employees when we mobilized to four additional Equinor platform rigs as awarded earlier in Q2. Our onshore and offshore teams have worked relentlessly to ensure a safe and effective start up and transition on all platforms, and we expect further modest headcount growth going forward as we deliver on the increased demand for our services in the market.
Growth in our other businesses in Eastern Hemisphere leveled out in the third quarter, but with the increased contracted platform drilling activity, scheduled well services projects and underlying forecasted growth in E&P spend, I am confident we will see sustained incremental growth in the coming quarters.
Finally, with only one quarter left in the year, we feel confident we can deliver our stated objectives of improved financial results in second half of 2018, an EBITDA margin improvement of 1-2% relative to 2017, and Capex below 3% of revenue.”
A conference call will be held at 08:00 London time, 09:00 Oslo time on November 2, 2018. To listen to the conference call, the following options are available:
To register for the webcast please go to https://archer.eventcdn.net/20181102/
B. Conference call
To access the call, which is open to the public, please contact the conference call operator at the participant telephone numbers listed below. Please call in 10 minutes prior to the scheduled start time, and ask for the "Archer Third Quarter 2018 Earnings release."
Participant Telephone Numbers:
|Norway:||+47 2350 0254|
|UK:||+44 (0)203 194 0544|
The operator will ask for your name and company. Following the presentation there will be a Q&A session. Information on "how to ask questions" will be given at the beginning of the Q&A session.
This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.