Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: How has the dynamic with clients changed regarding tender activity and delays? A: Bruno Morand, Vice President of Commercial and Business Development, explained that while there have been shifts in program timelines, the pipeline continues to grow positively. Some regions, like West Africa and Mexico, have been more stable, while Southeast Asia has seen more competitive behavior. Borr Drilling remains confident in its unique position and expects better utilization for its rigs compared to peers.
Q: Where do you see the strongest incremental demand heading into 2025 and 2026, particularly in the Middle East? A: Bruno Morand noted interesting pockets of activity in the Middle East, such as Kuwait and ONGC resuming contracts. While Aramco's activity levels are currently stable, any increase is likely a second-half 2025 event. West Africa and the Americas, including Mexico, are expected to provide potential demand upside in 2025.
Q: Why did Borr Drilling decide to swap cash dividends for share buybacks? A: CEO Patrick Schorn stated that due to the recent share price decline, the Board decided it was more attractive to buy back shares at low prices, maintaining the gross amount of shareholder returns. This approach allows flexibility in shareholder returns through dividends or buybacks based on attractiveness.
Q: Is the increase in accounts receivable mostly related to Pemex, and what is the current status? A: Patrick Schorn confirmed that Mexico's fluctuating payment patterns have contributed to the accounts receivable increase. Borr Drilling is exploring factoring agreements to monetize receivables and is optimistic about resolving payment issues with Pemex.
Q: What are the expectations for Pemex rigs in 2025, and how does it relate to their capital plans? A: CFO Magnus Vaaler expressed optimism that Borr Drilling's rigs will continue to play a key role in Pemex's operations, given their success in maintaining production levels. The government's commitment to maintaining production suggests potential for increased activity in Mexico in 2025 and beyond.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.