Borr Drilling Limited (NYSE:BORR) Q1 2022 Results Conference Call May 31, 2022 9:00 AM ET

Company Participants

Patrick Schorn - CEO

Magnus Vaaler - CFO

Conference Call Participants

Fredrik Stene - Clarksons Securities

Patrick Schorn

Good morning, and thank you for participating in the Borr Drilling First Quarter 2022 Earnings Call. My name is Patrick Schorn, and I'm talking to you from Oslo, Norway. With me on the call today is Magnus Vaaler, our CFO.

Next slide. Covering the essentials, I would like to remind all participants that some of the statements will be forward-looking. These matters involve risks and uncertainties that could cause actual results to differ materially from those projected in these statements. I therefore refer you to our latest public filings.

Next slide. The first quarter, similarly to the fourth quarter, has been very active in the marketing and business development department with good results in ultimate contract awards to Borr Drilling. In particular, the long-term contracts in the Middle East and Asia, which has brought our contractor's fleet to 20 rigs out of a total of 23 rigs.

During the quarter, we have prepared and put in operation several new rigs and will continue to do so in the months to come. Overall, we are pleased with our financial performance in the first quarter, marked by a strong top line growth. Taking into account the increased number of rigs we are preparing for future operations.

We expect revenues, adjusted EBITDA and cash from operations to show solid increases in the next quarters both as a result of these rigs commencing work, in addition to the rollover of contracts at higher day rates. We reiterate our guidance for 2022 with a revenue between $375 million to $400 million and adjusted EBITDA between $115 million and $140 million.

Now based on the development of the day rates we have seen thus far in the year, and our forecast of having our remaining 3 delivered rigs employed by the end of this year, our preliminary outlook for 2023 indicates an approximate doubling of headline revenues year-on-year and adjusted EBITDA to more than double from the 2022 forecast. As the year progresses, we will keep you informed of how these numbers are shaping up in more detail.

Magnus will now step you through the details of Q1. Magnus?

Magnus Vaaler

Thanks, Patrick. We are now on the slide key financials Q1 2022. The Q1 2022 revenue came in at $82 million in the quarter, an increase of $12.9 million or 19% compared to Q4 2021. This was split in $63.3 million of day rate revenues for our rigs on regular contracts and $18.7 million of related partner revenue, which is variable to earnings from a very good quarter with high economic utilization in our Mexico joint ventures. The number of rigs trading in the quarter went from 13 to 15 at the end of the quarter, and this number has further increased to 17 as of today.