Borr Drilling’s Earnings Call Highlights Strong Performance Amid Challenges

Borr Drilling ((BORR)) has held its Q3 earnings call. Read on for the main highlights of the call.

Borr Drilling’s recent earnings call conveyed a generally positive sentiment, underscored by the company’s robust operational performance, successful contract extensions, and a solid financial position. However, the call also addressed challenges such as sanctions and collection issues in Mexico, alongside an anticipated decrease in operating days for Q4 2025. Despite these hurdles, the overall market outlook remains optimistic, with signs of demand growth in key regions.

Strong Operational Performance

Borr Drilling reported a strong operational performance with 23 out of 24 rigs active, achieving a technical utilization rate of 97.9% and an economic utilization rate of 97.4%. The company saw a revenue increase of $9.4 million quarter-over-quarter, while adjusted EBITDA rose by 2% to $135.6 million, reflecting a margin of 48.9%.

Successful Contract Extensions and New Commitments

The company announced three contract extensions in Mexico, which expanded its operations into the Gulf of America and Angola. Additionally, Borr Drilling secured 22 new commitments, significantly adding $625 million to its backlog.

Improved Financial Position

Borr Drilling’s financial position improved with a free cash position of $227.8 million at the end of Q3 and total available liquidity of $461.8 million. The company also reported net cash provided by financing activities amounting to $97.2 million, attributed to net proceeds from a July 2025 equity offering.

Positive Market Outlook

The market outlook for Borr Drilling is positive, with increased jack-up demand across international markets. There are signs of demand growth in regions like Saudi Arabia and Mexico. The company expects its full-year 2025 adjusted EBITDA to be in the range of $455 million to $470 million.

Sanction-Induced Contract Terminations

International sanctions affecting a counterparty in Mexico led to the termination of both old and new contracts, which is expected to impact the company’s Q4 2025 results.

Challenges with Collections in Mexico

Borr Drilling faced challenges with collections in Mexico, although collections resumed in September with approximately $19 million received in September and October. The company is actively working to improve payment terms.

Fewer Operating Days Expected in Q4 2025

The company anticipates fewer operating days in Q4 2025 due to rigs transitioning between contracts and the impact of sanction-induced contract terminations.

Forward-Looking Guidance

CEO Bruno Morand highlighted Borr Drilling’s strong performance, with expectations of a full-year 2025 adjusted EBITDA between $455 million and $470 million. Despite fewer operating days anticipated in Q4 2025 due to rig transitions and sanctions, the company remains optimistic about tightening market conditions and increasing jack-up demand in key regions like Saudi Arabia and Mexico.

In summary, Borr Drilling’s earnings call reflected a positive sentiment with strong operational metrics and financial health, despite facing some challenges. The company remains optimistic about future market conditions and demand growth in key regions, setting a promising outlook for the coming quarters.