Transocean Ltd (RIG) Reports Q3 2023 Results: Net Loss of $220 Million
Transocean Ltd (NYSE:RIG) reported a net loss of $220 million, or $0.28 per diluted share, for Q3 2023.
Contract drilling revenues for Q3 2023 decreased sequentially by $16 million to $713 million.
Operating and maintenance expense was $524 million, compared with $484 million in the prior quarter.
Transocean increased its backlog for the sixth consecutive quarter, ending Q3 at $9.4 billion.
Transocean Ltd (NYSE:RIG) released its Q3 2023 earnings report on October 31, 2023. The company reported a net loss attributable to controlling interest of $220 million, or $0.28 per diluted share, for the three months ended September 30, 2023. This includes net favorable items of $60 million, or $0.08 per diluted share. After considering these net favorable items, the adjusted net loss for Q3 2023 was $280 million, or $0.36 per diluted share.
Financial Performance
Contract drilling revenues for Q3 2023 decreased sequentially by $16 million to $713 million. This decrease was primarily due to idle time on three ultra-deepwater floaters and lower revenue generated by four rigs that were undergoing contract preparation and mobilization activities during the quarter. Operating and maintenance expense was $524 million, compared with $484 million in the prior quarter. The sequential increase was primarily due to higher shipyard costs and contract preparation for seven rigs and a full quarter of operations from Deepwater Titan and Transocean Norge.
Interest and Tax Rate
Interest expense, net of amounts capitalized, was $232 million, compared with $168 million in the prior quarter. The Effective Tax Rate was 16.3%, up from 8.8% in the prior quarter. The increase was primarily due to settlements and expirations of uncertain tax positions and releases of valuation allowances.
Cash Flow and Capital Expenditures
Cash used in operating activities was $44 million during Q3 2023, representing a decrease of $201 million compared to the prior quarter. The sequential decrease is primarily due to increased cash disbursements for preparing and mobilizing seven rigs for contracts and timing of interest payments. Q3 2023 capital expenditures of $50 million decreased primarily due to reduced spending for newbuild rigs under construction, compared with $76 million in the prior quarter.
CEO Commentary
For the sixth consecutive quarter Transocean increased its backlog, ending the third quarter at $9.4 billion dollars. Not only is the size of our backlog industry-leading, but it also contains many of the industrys highest dayrate fixtures, said Chief Executive Officer, Jeremy Thigpen. In particular, we are pleased to have secured a three-year contract for Deepwater Aquila in Brazil, as it facilitated the acquisition of the outstanding interest in Liquila Ventures Ltd. The addition of the Aquila further reinforces Transoceans leadership position in the high-specification, ultra-deepwater drilling market, as she is our eighth 1400 short ton, dual activity, seventh generation drillship, of which, there are only 12 in the global competitive fleet.
Explore the complete 8-K earnings release (here) from Transocean Ltd for further details.
This article first appeared on GuruFocus.
