Archer Limited · OSL:ARCH
Archer — Q3 2019 Earnings Presentation
17 slides from Archer's earnings presentation, Nov 6, 2019
Slide 1: Third Quarter 2019
6 November 2019 Third Quarter 2019 Executive Chairman Kjell-Erik Østdahl and CFO Dag Skindlo 1
Slide 2: Disclaimer – forward looking statements
Disclaimer – forward looking statements Cautionary Statement Regarding Forward-Looking Statements In addition to historical information, this press release contains statements relating to our future business and/or results. These statements include certain projections and business trends that are “f
Slide 3: Key highlights
Key highlights • Fifth quarter in the row with EBITDA margin above 10% • Both Modular Rigs on contract starting in 2020 • New five year contract for three rigs with YPF • Renewed contract with Aker BP for Platform Drilling Private & Confidential 3
Slide 4: Archer – third quarter financial results
Archer – third quarter financial results Revenue [$m] EBITDA [$m] EBIT [$m] 250 227.6 25 22.4 23.4 12 11.1 213.7 200 20 10 8.6 8 150 15 6 100 10 4 50 5 2 0 0 0 Q3-18 Q3-19 Q3-18 Q3-19 Q3-18 Q3-19 • Revenue of $227.6 million • EBITDA of $23.4 million, or 10% of revenue • EBIT of $11.1 million, or 5%
Slide 5: Platform Drilling & Engineering
B U S I N E S S U N I T U P D AT E Platform Drilling & Engineering Revenue and EBITDA [$m and %] Financial highlights Revenues ($m) EBITDA (%) • 26% increase in Revenue compared to Q3 150 125.9 125.6 15% 120.3 115.5 2018 99.7 100 10% • Negative currency impact offset by high rentals activity and wel
Slide 6: New contract for Topaz MDR signed with Equinor
B U S I N E S S U N I T U P D AT E New contract for Topaz MDR signed with Equinor • Permanent Plug and Abandonment campaign on Heimdal Platform in Norway. • Rig currently undergoing reactivation and recertification program prior to mobilisation in Q2 2020 • Operational start estimated to Q2 2020 • F
Slide 7: Well Services
B U S I N E S S U N I T U P D AT E Well Services Revenue and EBITDA [$m and %] Financial highlights Revenues ($m) EBITDA (%) 40 20% • Strong development relative to Q3 2018: 26.5 30.4 29.7 29.5 29.8 • 12% increase in Revenue 30 15% • 63% increase in EBITDA 20 10% • Margin expansion 10 5% • New techn
Slide 8: Land Drilling
B U S I N E S S U N I T U P D AT E Land Drilling Revenue and EBITDA [$m and %] Financial highlights Revenues ($m) EBITDA (%) • Revenue down ~9% relative to same quarter 100 82.3 20% 79.4 80.4 80.3 72.3 last year and down 10% relative to the 80 15% previous quarter 60 10% • Large depreciation of the
Slide 9: New contract with YPF
B U S I N E S S U N I T U P D AT E New contract with YPF • The operators’ well design now require longer laterals to improve financial returns • With the new contract, three of Archer’s six modern NOV Ideal rigs are being upgraded for YPF • Contract duration is for 5 years following rig upgrades • E
Slide 10: Archer Group – financial highlights third quarter 2019
Archer Group – financial highlights third quarter 2019 Revenue [$m] EBITDA [$m, %] 250 233 236 228 30 226 214 25.0 14% 24.3 23.5 23.4 200 25 22.4 12% 20 10% 150 15 8% 100 6% 10 4% 50 5 2% 0 0 0% Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Capex [$m] Net Interest Bearing Debt [$m] 16
Slide 11: Condensed profit and loss statement
FINANCIALS Condensed profit and loss statement YTD YTD • Third quarter revenue of $227.6 million, an (Figures in $ million) Q3 18 Q3 19 2018 2019 increase of 6.5% relative to corresponding Operating revenues 192.9 203.5 598.5 626.5 quarter last year. Reimbursable revenue 20.8 24.2 58.0 62.4 Total Re
Slide 12: Condensed balance sheet
FINANCIALS Condensed balance sheet (Figures in $ million) 30/09/18 30/06/19 30/09/19 Assets ASSETS • Total current assets decreased by $27.8 million in Cash, cash equivalents & restricted cash 27.3 51.1 18.7 Accounts receivables 124.4 148.1 148.6 the third quarter compared to second quarter, with In
Slide 13: Summary and outlook
Summary and outlook • Archer expects continued strong operating and financial performance in Eastern Hemisphere in accordance with previous guidance. • Lower activity and extraordinary costs in relation to work force reductions in Western Hemisphere will negatively impact Q4 results. • Archer expect
Slide 14: Segment key financials
APPENDIX Segment key financials Eastern Revenues ($m) EBITDA (%) Hemisphere 200 15.0 % 150.8 145.2 155.4 155.4 150 126.2 10.0 % Platform 100 drilling & 5.0 % Engineering 50 0 0.0 % Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Well $m Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Services Revenues 126.2 150.8 145.2 155.4 155.4 EBI
Slide 15: Condensed profit and loss statement – last 5 quarters
APPENDIX Condensed profit and loss statement – last 5 quarters (Figures in $ million) Q3 18 Q4 18 1) Q1 192 ) Q2 192) Q3 19 Operating revenues 192.9 212.7 210.3 212.8 203.5 Reimbursable revenue 20.8 20.5 15.4 22.9 24.2 Total Revenues 213.7 233.2 225.7 235.6 227.6 EBITDA before exceptional items 25.7
Slide 16: Condensed balance sheet – last 5 quarters
APPENDIX Condensed balance sheet – last 5 quarters (Figures in $ million) 30/09/18 31/12/18 1) 31/03/19 30/06/19 30/09/19 ASSETS Cash, cash equivalents & restricted cash 27.3 31.5 32.2 51.1 18.7 Accounts receivables 124.4 137.0 142.8 148.1 148.6 Inventories 51.8 51.9 52.2 52.1 52.2 Right of use asse
Slide 17: Condensed cash flow statement – last 5 quarters
APPENDIX Condensed cash flow statement – last 5 quarters (Figures in $ million) Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Operating activities (1.5) 36.1 4.0 18.1 (15.0) Investing activities 25.1 (8.6) (2.4) (5.2) (14.8) Financing activities (30.3) (15.2) (0.8) 10.0 2.4 FX effect 0.8 (8.1) (0.1) (4.1) (5.0) Tot