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Valaris Ltd (NYSE:VAL) reported Q3 2023 revenues of $455.1 million, missing the consensus of $469.4 million.
Excluding reimbursable items, revenues increased to $427.2 million sequentially on two jackups and one floater commencing contracts and an increase in average daily revenue for both the floater and jackup fleets.
In Q3, the company got new contracts and extensions, with an associated contract backlog of around $465 million, increasing to $3.2 billion.
Contract drilling expenses stood at $390.9 million (vs. $336.7 million in Q3 FY22). Adjusted EBITDA stood at $40.0 million vs. $83.5 million a year ago.
EPS of $0.17 was worse than the consensus of $0.28.
The Q3 FY23 results were lower than prior guidance, mainly due to lower-than-expected floater revenue efficiency and two contract commencement delays.
Capital expenditures increased to $106 million in Q3 from $71.0 million in Q2 2023. As of September 30, 2023, cash and equivalents stood at $1.1 billion.
Valaris repurchased $85 million of shares in Q3 and $171 million to date. The company reiterated the 2023 share repurchase target at $200 million.
"The outlook for Valaris is positive, with increasing demand and constrained supply tightening the market. We are confident in the strength and duration of this upcycle, and we expect to deliver meaningfully improved earnings in both 2024 and 2025 due to the impact of recent and ongoing drillship reactivations at attractive day rates, as well as the repricing of rigs from legacy day rate contracts to higher markets rates," said Anton Dibowitz, President and CEO.
Price Action: VAL shares closed lower by 3.14% at $66.96 on Monday.
Posted In: VAL
