HAMILTON, Bermuda, May 24, 2024 /PRNewswire/ -- Paratus Energy
Services Ltd. ("Paratus" or the "Company") today announced a
trading update for the first quarter 2024 and updates on Paratus,
its subsidiaries and associated companies ("Paratus Group" or the
"Group").
Company overview
Paratus Energy Services Ltd. is the holding company of a group
of leading energy services companies. The Group is primarily
comprised of its wholly-owned subsidiary Fontis Energy, a 50/50 JV
interest in Seabras (equity accounted), and a 24% ownership
interest in Archer Ltd. (equity accounted).
1. Key Highlights
- Delivered adjusted EBITDA of $53
million on $109 million of
gross revenue
- Exited the quarter with a cash balance of $126 million and $638
million in net debt
- Secured average contractual rates of $118 thousand/day at an average utilization of
99.6% and $205 thousand/day at an
average utilization of 98.7% for Fontis and Seabras,
respectively
- Bolstered Seabras' backlog by $1.8
billion
- Appointment of Group CFO
- Share split effected to simplify capital structure
- Rebranding of SeaMex
1.1 Paratus Group
In the first quarter 2024, the Group, including the Company's
share in Seabras JV, generated $109
million in gross revenue and $53
million in adjusted EBITDA, compared to $97 million and $43
million in the first quarter 2023, respectively. The
full-year 2023 adjusted EBITDA stood at $227
million on the back of gross revenues totaling $430 million.
The Group closed the quarter with a cash balance of $126 million and $638
million in net debt, compared to $134
million and $632 million at
year-end 2023, respectively. Compared to first quarter 2023, the
cash balance has increased by $25
million whilst the net debt was reduced by $60 million (Q1 2023: Cash of $101 million and net debt of $698 million), largely driven by the retirement
of senior secured notes at Fontis Energy.
1.2 Fontis Energy (previously SeaMex)
During the first quarter 2024, the Company's wholly owned
subsidiary Fontis Holdings Ltd. ("Fontis Energy") and its
subsidiaries generated $56 million in
gross revenue and $27 million in
EBITDA. Compared to the first quarter 2023, gross revenue and
EBITDA increased by 30% and 81%, respectively, largely driven by
downtime on the Courageous and Defender rigs experienced in the
first quarter 2023. In 2023, Fontis Energy generated $205 million in gross revenue and $105 million in EBITDA.
In the first quarter 2024, Fontis Energy earned an average
contractual rate of $118 thousand per
day at an average utilization of 99.6% and ended the quarter with
$419 million in contract backlog.
As of March 31, 2024, the accounts
receivables balance was $222 million,
up from $174 million at year-end
2023. Due to normal administrative requirements associated with its
name change (as further described in Section 2.1), Fontis Energy
was unable to submit new billings to its key customer for a period
of six months, leading to a build in accounts receivable. Fontis
Energy believes this is a non-recurring event and a normalization
of collections will occur as the name change has now been
completed. Beginning in March 2024,
payments from its key customer resumed ahead of anticipated timing.
Fontis Energy collected $16 million
and $14 million in March and
April 2024, respectively.
"Since the separation from Seadrill, the new management team has
had a clear focus, solely dedicated to the Fontis business, and
this has allowed us to build a stronger relationship with our key
customer," said Raphael Siri, CEO
of Fontis Energy. "Such improved cooperation was visible with
the timely completion of the name change and follow-up payments
received in a shorter time than anticipated. We will continue to
work together to bring our accounts receivable to a more routine
level."
1.3 Joint Venture in Seabras (figures reflect 100%)
Seabras UK Limited, a wholly owned subsidiary of Paratus, holds
a 50% equity interest in Seabras Sapura Holding GmbH, its
associated company, Seabras Sapura Participaҫões S.A and their
subsidiaries (collectively with Seabras UK Limited, "Seabras" or
"JV").
During the first quarter 2024, Seabras generated $107 million in revenue (Q1 2023: $108 million) and $55
million in EBITDA (Q1 2023: $61
million). The reduction in EBITDA compared to the first
quarter 2023 was largely due to a slight increase in off-hire days
and modest cost increases.
In the first quarter 2024, Seabras earned an average contractual
rate of $205 thousand per day at an
average utilization of 98.7% and ended the quarter with
$2.1 billion in contract backlog, pro
forma for the contract awards announced on May 10, 2024.
As previously announced, pursuant to an agreed plan amongst the
JV shareholders, Seabras has distributed and will continue to
distribute all excess cash to its JV shareholders since
April 2023. During the first quarter
2024, Paratus received $24 million
from Seabras.
2. Significant Subsequent Events and Other Updates
2.1 Fontis Energy Name Change
Since commencing its separation from Seadrill in mid-2023, the
entity formerly known as SeaMex Holdings, LLC ("SeaMex") has
undergone a name change to Fontis Energy. This effort has provided
for complete separation from Seadrill and enhanced the Fontis
Energy brand as a leading standalone player in the offshore
drilling space. The name change highlights Paratus' successful
efforts to complete its separation from its former parent company
Seadrill.
"Our new Fontis Energy vision, values and logo – all rotating
around integrity, dependability and performance – form the basis of
our improved business model and deliverables that will fuel our
growth," said Raphael Siri, CEO
of Fontis Energy.
Going forward, reference to SeaMex will be discontinued and will
be superseded with Fontis Energy.
2.2 Seabras secures additional backlog of $1.8bn for its full fleet with new contracts from
Petrobras
On May 10, 2024, Paratus announced
that certain entities of Seabras had successfully been awarded
contracts for its full fleet of six multi-purpose pipe-laying
support vessels ("PLSV") as part of a competitive Petrobras tender
process. This achievement bolstered Seabras' backlog by
approximately $1.8 billion. Following
the contract award, Seabras' backlog stands at $2.1 billion.
The contracts, each with a three-year term, will commence on
different mobilization dates between May
2024 and June 2025 according
to the current contract schedule for each of the PLSVs, with the
longest dated contract going through 2028, improving secured
backlog visibility up to another four years.
The contract awards represent a meaningful improvement to
dayrates, reflecting the positive industry momentum and the growing
demand for PLSVs in Brazil. This
achievement is a testament to Seabras' unwavering commitment to
operational excellence, safety, and customer satisfaction. Since
commencing operations in 2014, the vessels have maintained an
average technical utilization of approximately 98%.
2.3 Governance Update
On May 21, 2024, Paratus, with the
approval of its shareholders, has undertaken and completed an
administrative reorganisation of its existing share capital and
governance structure.
The effect of the reorganisation is that the capital structure
of the Company has been simplified, to reduce the number of share
classes to a single class of Class A Common Shares of US
$0.00002 each, via the following
steps:
-
- with effect from March 15, 2024,
the Class C Common shares of US $0.01 each in the Company were redesignated to
Class A Common Shares of US $0.01
each in the Company; and
- with effect from May 21, 2024,
each of the Class A Common Shares of US$0.01 each in the Company (including those
existing following the above step), were sub-divided into 500 A
Common Shares of US$0.00002
each.
In conjunction with these steps, the governance framework for
the Company has been adjusted such that, with effect from
May 21, 2024:
-
- the shareholders' agreement relating to the Company dated
January 20, 2022 has been terminated
and will not be replaced; and
- the Company has adopted a new set of bye-laws (in substitution
for the then existing bye-laws) which will form the basis for the
governance of the Company going forward.
Following the administrative reorganisation, Paratus had total
Class A Common Shares of 154,015,990.
2.3 Appointment of Group CFO
The Company is pleased to announce the appointment of Mr. Baton
Haxhimehmedi as the Group Chief Financial Officer ("GCFO") of
Paratus Management Norway AS with effect from June 1, 2024. Mr. Haxhimehmedi most recently held
positions as Deputy CFO and Group Head of Finance of DNO ASA, an oil and gas company listed on the
Oslo Stock Exchange, and previous senior audit positions in various
'Big 4" accounting firms, mainly working with international
upstream oil and gas clients.
"We are pleased to welcome Baton Haxhimehmedi as our Group Chief
Financial Officer," said Mei Mei
Chow, Chairperson of the Paratus board. "With the addition
of Baton's extensive experience in a listed oil oil and gas company
with global operations, coupled with his strong track record in
senior management roles, Baton has joined us at a pivotal time.
Together with Robert Jensen, the
Paratus Group leadership team is now well positioned to further
develop the business as a leading oilfield services company and
continue executing on our strategic priorities."
Financial Tables and Fleet Status Report
Basis of preparation
These financials are presented in accordance with generally
accepted accounting principles in the
United States of America ("US GAAP"). The amounts are
presented in United States dollar
("US dollar", "$" or "US$"). The accounting policies applied are
consistent with those followed in the preparation of the Annual
Report.
The interim financial information for 2024 and 2023 is
unaudited.
Non-GAAP performance measurements definitions
The Company uses certain financial information calculated on a
basis other than in accordance with US GAAP as listed below. These
non-GAAP financial measures are important measures that the Company
uses to assess its financial performance.
Gross revenues – Represents operational revenue before
amortization of favorable contracts and tax on revenue. Paratus
Group revenue include JV share of Seabras gross revenue (see below
reconciliation).
EBITDA – Earnings before interest, tax, depreciation and
amortization, represents net income/(loss) adjusted for:
depreciation and impairment, credit loss allowances, other
non-operating income, income from equity method investments, net
financial items, and income tax.
Adjusted EBITDA – Represents EBITDA based on proportional
consolidation method of accounting for Seabras JV according to
internal management reporting. The bridge between the management
reporting and the figures reported in accordance with the equity
method is presented below.
Unaudited
Financials
|
|
Q1 2024
|
Q1 2023
|
FY 2023
|
(US $ in
Millions)
|
Management reporting
(including 50% in Seabras JV)
|
Equity accounting
adjustment
|
Equity method
reporting
|
Management reporting
(including 50% in Seabras JV)
|
Equity accounting
adjustment
|
Equity method
reporting
|
Management reporting
(including 50% in Seabras JV)
|
Equity accounting
adjustment
|
Equity method
reporting
|
Debt
|
765
|
-50
|
715
|
800
|
-56
|
744
|
766
|
-51
|
715
|
Cash
|
126
|
-18
|
108
|
101
|
-47
|
55
|
134
|
-19
|
115
|
Net
Debt/-Cash
|
638
|
-31
|
607
|
698
|
-9
|
689
|
632
|
-32
|
600
|
|
|
|
|
|
|
|
|
|
|
Gross
Revenue
|
109
|
-53
|
56
|
97
|
-54
|
43
|
430
|
-225
|
205
|
Adjusted
EBITDA
|
53
|
-27
|
26
|
43
|
-31
|
12
|
227
|
-132
|
95
|
Contract backlog – Sum of estimated undiscounted revenue
related to secured contracts. Contract backlog may be subject
to price indexation clauses or other factors that may intervene
with and/or result in delays in revenue realization, and it does
not include potential growth or value of non-declared options
within existing contracts.
Utilization rate – Utilization rate of vessel / rigs is based on
actual operating days which excludes days at yard for periodical
maintenance, upgrading, transit or idle time between contracts.
Schedule 1. Key
Financial Highlights
|
|
Unaudited financials
(management reporting)(1)
|
(US $ in
Millions)
|
Q1 2024
|
Q1 2023
|
FY 2023
|
Fontis
Energy
|
|
|
|
Debt (2)
|
$0
|
$46
|
$0
|
Cash (3)
|
65
|
52
|
55
|
Net
Cash (4)
|
65
|
6
|
55
|
Gross
Revenue
|
56
|
43
|
205
|
EBITDA
|
27
|
15
|
105
|
Contract
Backlog
|
419
|
500
|
411
|
Receivables
Balance(5)
|
222
|
146
|
174
|
|
|
|
|
Seabras JV (figures
reflect 100%)
|
|
|
Debt (2)
|
100
|
111
|
102
|
Cash (3)
|
37
|
93
|
38
|
Net
Debt (4)
|
63
|
18
|
64
|
Gross
Revenue
|
107
|
108
|
450
|
EBITDA
|
55
|
61
|
264
|
Contract
Backlog
|
2,096
|
604
|
345
|
|
|
|
|
Paratus
Group (1)
|
|
|
|
Debt (2)
|
765
|
800
|
766
|
Cash (3)
|
126
|
101
|
134
|
Net
Debt (4)
|
638
|
698
|
623
|
|
|
|
|
Gross
Revenue
|
109
|
97
|
430
|
Adjusted
EBITDA
|
53
|
43
|
227
|
Notes:
- See section about non-Gaap measures
- Excludes intercompany debt and any amortization of fees and
fair value adjustment; represents debt principal only
- Includes cash and restricted cash
- Calculated as gross debt less cash
- Reflected before expected credit loss allowances
- Reflected pro forma to include the Petrobras contract
awards announced on May 10, 2024
Schedule 2. Fleet
Status Report
|
|
Fontis
Energy
|
Rig Name
|
Generation /
Type
|
Built
|
Location
|
Client
|
Start
|
Expire
|
Defender
|
BE
|
2007
|
Mexico
|
PEMEX
|
Mar-20
|
Jan-26
|
Çourageous
|
BE
|
2007
|
Mexico
|
PEMEX
|
Mar-20
|
Nov-26
|
Intrepid
|
BE
|
2008
|
Mexico
|
PEMEX
|
Mar-20
|
May-26
|
Oberon
|
BE
|
2013
|
Mexico
|
PEMEX
|
Mar-20
|
Oct-25
|
Titania
|
BE
|
2014
|
Mexico
|
PEMEX
|
May-24
|
Apr-25
|
Seabras
|
Vessel Name
|
Generation /
Type
|
Built
|
Location
|
Client
|
Start
|
Expire
|
Diamante
|
PLSV
|
2014
|
Brazil
|
Petrobras
|
Oct-21
|
Mar-25
|
|
PLSV
|
2014
|
Brazil
|
Petrobras
|
Mar-25
|
Mar-28
|
Topazio
|
PLSV
|
2014
|
Brazil
|
Petrobras
|
Mar-22
|
Mar-25
|
|
PLSV
|
2014
|
Brazil
|
Petrobras
|
Apr-42
|
Mar-28
|
Esmeralda
|
PI-SV
|
2016
|
Brazil
|
Petrobras
|
Apr-16
|
Aug-24
|
|
PISV
|
2016
|
Brazil
|
Petrobras
|
Sep-24
|
Sep-27
|
Onix
|
PLSV
|
2015
|
Brazil
|
Enauta
|
Apr-24
|
Jun-25
|
|
PLSV
|
2015
|
Brazil
|
Petrobras
|
Jun-24
|
Jun-28
|
Jade
|
PLSV
|
2016
|
Brazil
|
PetroRio
|
Apr-24
|
May-24
|
|
PLSV
|
2016
|
Brazil
|
Petrobras
|
May-24
|
May-27
|
Rubi
|
PISV
|
2016
|
Brazil
|
Petrobras
|
Jun-16
|
Sep-24
|
|
PLSV
|
2016
|
Brazil
|
Petrobras
|
Sep-24
|
Sep-27
|
Paratus -- Forward-Looking Statements
This release includes forward-looking statements. Such
statements are generally not historical in nature, and specifically
include statements about the Company's and / or the Paratus Group's
(including any member of the Paratus Group) plans, strategies,
business prospects, changes and trends in its business and the
markets in which it operates. These statements are based on
management's current plans, expectations, assumptions and beliefs
concerning future events impacting the Company and / or the Paratus
Group and therefore involve a number of risks, uncertainties and
assumptions that could cause actual results to differ materially
from those expressed or implied in the forward-looking statements,
which speak only as of the date of this news release. Important
factors that could cause actual results to differ materially from
those in the forward-looking statements include, but are not
limited to, management's reliance on third party professional
advisors and operational partners and providers, the Company's
ability (or inability) to control the operations and governance of
certain joint ventures and investment vehicles, oil and energy
services and solutions market conditions, subsea services market
conditions, and offshore drilling market conditions, the cost and
timing of capital projects, the performance of operating assets,
delay in payment or disputes with customers, the ability to
successfully employ operating assets, procure or have access to
financing, ability to comply with loan covenants, liquidity and
adequacy of cash flow from operations of its subsidiaries and
investments, fluctuations in the international price of oil or
alternative energy sources, international financial, commodity or
currency market conditions, including, in each case, the impact of
pandemics and related economic conditions, changes in governmental
regulations, including in connection with pandemics, that affect
the Paratus Group, increased competition in any of the industries
in which the Paratus Group operates, the impact of global economic
conditions and global health threats, including in connection with
pandemics, our ability to maintain relationships with suppliers,
customers, joint venture partners, professional advisors,
operational partners and providers, employees and other third
parties and our ability to maintain adequate financing to support
our business plans, factors related to the offshore drilling,
subsea services, and oil and energy services and solutions markets,
the impact of global economic conditions, our liquidity and the
adequacy of cash flows for our obligations, including the ability
of the Company's subsidiaries and investment vehicles to pay
dividends, political and other uncertainties, the concentration of
our revenues in certain geographical jurisdictions, limitations on
insurance coverage, our ability to attract and retain skilled
personnel on commercially reasonable terms, the level of expected
capital expenditures, our expected financing of such capital
expenditures, and the timing and cost of completion of capital
projects, fluctuations in interest rates or exchange rates and
currency devaluations relating to foreign or U.S. monetary policy,
tax matters, changes in tax laws, treaties and regulations, tax
assessments and liabilities for tax issues, legal and regulatory
matters, customs and environmental matters, the potential impacts
on our business resulting from climate-change or greenhouse gas
legislation or regulations, the impact on our business from
climate-change related physical changes or changes in weather
patterns, and the occurrence of cybersecurity incidents, attacks or
other breaches to our information technology systems, including our
rig operating systems. Consequently, no forward-looking statement
can be guaranteed.
Neither the Company nor any member of the Paratus Group
undertakes any obligation to update any forward-looking statements
to reflect events or circumstances after the date on which such
statement is made or to reflect the occurrence of unanticipated
events. New factors emerge from time to time, and it is not
possible for us to predict all of these factors. Further, we cannot
assess the impact of each such factors on our businesses or the
extent to which any factor, or combination of factors, may cause
actual results to be materially different from those contained in
any forward-looking statement.
CONTACT:
paratus@hawthornadvisors.com
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