Borr Drilling Ltd (BORR) 2022 Q2 法說會逐字稿

Ladies and gentlemen, hello, and welcome to the Borr Drilling Limited Q2 2022 Results Presentation. My name is Maxine, and I'll be coordinating the call today. (Operator Instructions) I will now hand you over to your host, Patrick Schorn, CEO, to begin. Patrick, please go ahead when you're ready.

女士們先生們，大家好，歡迎來到 Borr Drilling Limited 2022 年第二季度業績報告。我的名字是 Maxine，我將在今天協調電話會議。 （操作員說明）我現在將您交給您的主持人，首席執行官 Patrick Schorn，開始。帕特里克，準備好後請繼續。

Good day, and thank you for participating in the Borr Drilling Second Quarter 2022 Earnings Call. I'm Patrick Schorn, and I'm talking to you from London. And with me on the call today is Magnus Vaaler, our CFO.

美好的一天，感謝您參加 Borr Drilling 2022 年第二季度財報電話會議。我是 Patrick Schorn，我在倫敦與你交談。今天與我通話的是我們的首席財務官 Magnus Vaaler。

Next slide. First, covering the necessary. I would like to remind all participants that some of the statements will be forward-looking. These matters involve risks and uncertainties that could cause actual results to differ materially from those projected in these statements. I therefore refer you to our latest public filings.

下一張幻燈片。首先，覆蓋必要的。我想提醒所有參與者，其中一些陳述將是前瞻性的。這些事項涉及可能導致實際結果與這些陳述中預測的結果大不相同的風險和不確定性。因此，我建議您參考我們最新的公開文件。

Next slide. I'm very pleased how the market has developed over the quarter. We have seen increased interest in our assets. Day rates are increasing to levels of $130,000 to $150,000 per day and utilization for the modern rigs is exceeding 92%. In addition, the discussion with customers has shifted from only a commercial discussion on day rates towards one where the ability to deliver a rig on time has become the priority, which has allowed us to win tenders at the high end of the day rate range.

下一張幻燈片。我很高興市場在本季度的發展情況。我們看到人們對我們的資產越來越感興趣。日費率正在增加到每天 130,000 至 150,000 美元的水平，現代鑽機的利用率超過 92%。此外，與客戶的討論已從僅針對日費率的商業討論轉變為優先考慮按時交付鑽機的能力，這使我們能夠以日費率範圍的高端贏得投標。

For the quarter, revenue has increased by 28% to $105 million and adjusted EBITDA has increased by 73% to $37 million. For the startup of various operations, we have used additional cash approximately $16 million out of the $20 million reduction in the cash balance is due to just that. When it comes to the fleet, we have currently 20 rigs contracted with several tender opportunities underway for each of the 3 remaining delivered rigs in the operational fleet. When it comes to the rigs under construction, we have announced that 3 of these will be sold as part of our refinance and the remaining 2 will be delivered by 2025.

本季度，收入增長 28% 至 1.05 億美元，調整後 EBITDA 增長 73% 至 3700 萬美元。對於各種業務的啟動，我們已經使用了大約 1600 萬美元的額外現金，而現金餘額減少了 2000 萬美元。就船隊而言，我們目前已簽訂了 20 台鑽井平台的合同，並且正在為運營船隊中剩餘的 3 台交付的鑽井平台中的每台進行招標。至於在建鑽機，我們宣布其中 3 台將作為再融資的一部分出售，其餘 2 台將於 2025 年交付。

Magnus will now step you through the details of Q1.

Magnus 現在將帶您了解第一季度的詳細信息。

Thanks, Patrick. Q2 2022 revenue came in at $105.3 million, an increase of $23.3 million or 28% compared to Q1 2022. This was split in $87.7 million in dayrate revenues for our rigs on regular contracts and $17.6 million in related party revenue, which is payable to earnings for a very good quarter of high economic utilization in our Mexico joint ventures. The number of rigs trading in the quarter went from between 13 and 15 in Q1 to 17% at the end of the second quarter.

謝謝，帕特里克。 2022 年第二季度的收入為 1.053 億美元，與 2022 年第一季度相比增加了 2330 萬美元或 28%。這分為 8770 萬美元的常規合同鑽機日費收入和 1760 萬美元的關聯方收入，該收入應支付給收益在我們的墨西哥合資企業中獲得了一個非常好的季度高經濟利用率。本季度交易的鑽井平台數量從第一季度的 13 至 15 台增加到第二季度末的 17%。

Rig operating and maintenance expenses for Q2 was $65.5 million. The increase from previous quarter is mainly due to more rigs on contracts during the quarter and $3.6 million increase in amortization of deferred mobilization and contract preparation costs. Impairment loss for Q2 2022 was $124.4 million. This is a result of the company entering into an LOI during the quarter to sell 3 newbuild rigs at Keppel Shipyard in connection with our refinancing. The impairment is due to advanced payments and capitalized interest that was recorded for the rigs.

第二季度的鑽機運營和維護費用為 6550 萬美元。較上一季度的增長主要是由於本季度的合同鑽機數量增加以及延期動員和合同準備成本的攤銷增加了 360 萬美元。 2022 年第二季度的減值損失為 1.244 億美元。這是該公司在本季度簽訂意向書以出售吉寶船廠的 3 台新建鑽井平台與我們的再融資有關的結果。減值是由於為鑽井平台記錄的預付款和資本化利息。

Total financial expenses were $36.9 million in the quarter, which is an increase of $1.6 million from Q1 2022. The overall increase is primarily a result of an increase in interest expenses, offset by interest income earned on the funding provided to our JVs. Net loss for the quarter was $165.3 million, which is an increase of $114 million from Q1 2022. Excluding the impairment for the quarter, net loss decreased by $10.4 million. Adjusted EBITDA for the quarter was $37 million, an increase of $15.6 million or 73% from Q1 2022, evidencing the compounding impact of improving day rates and incremental activity.

本季度總財務費用為 3690 萬美元，比 2022 年第一季度增加了 160 萬美元。總體增長主要是由於利息費用的增加，但被提供給我們的合資企業的資金所賺取的利息收入所抵消。本季度的淨虧損為 1.653 億美元，比 2022 年第一季度增加了 1.14 億美元。不計本季度的減值，淨虧損減少了 1040 萬美元。本季度調整後的 EBITDA 為 3700 萬美元，比 2022 年第一季度增加 1560 萬美元或 73%，這證明了提高日費率和增加活動的複合影響。

Our free cash position at the end of Q2 was $29.7 million and our restricted cash $8.1 million. Total cash and restricted cash decreased by $20.5 million in the quarter and is primarily a result of cash used in operations of $8.5 million, which includes interest payments of $15 million, cash used on jack-up additions, such as reactivations of $15.9 million and cash proceeds from the Q2 2022 sales under our ATM program of $3.6 million. Total cash receipts from Mexico in the quarter was $13.7 million versus $7.3 million in the previous quarter.

我們在第二季度末的自由現金頭寸為 2970 萬美元，我們的受限現金為 810 萬美元。本季度現金和受限現金總額減少了 2050 萬美元，主要是由於運營中使用的現金 850 萬美元，其中包括 1500 萬美元的利息支付、自升式增加所使用的現金，例如重新激活 1590 萬美元和現金我們的 ATM 計劃下 2022 年第二季度的銷售收入為 360 萬美元。本季度來自墨西哥的總現金收入為 1370 萬美元，而上一季度為 730 萬美元。

Moving to the next slide. We are pleased to announce that we are continuing to progress on the refinancing with our secured creditors where agreements in principle has been reached to extend the debt maturing in 2023 to 2025. This includes the current bank facility, we have contemplated refinancing with 2 new facilities provided by the current lenders and secured by the same rates providing security today. For the Heidrun facility, we have an agreement to extend the loans to January 2025 in return for some down payments in 2022, down to a loan balance of approximately $152 million and regular quarterly debt amortization starting in 2023.

轉到下一張幻燈片。我們很高興地宣布，我們正在繼續與我們的有擔保債權人進行再融資，原則上已達成協議，將 2023 年到期的債務延長至 2025 年。這包括目前的銀行融資，我們已考慮通過 2 項新融資進行再融資由當前的貸方提供，並以今天提供安全的相同利率擔保。對於 Heidrun 設施，我們已達成協議將貸款延長至 2025 年 1 月，以換取 2022 年的部分首付，貸款餘額降至約 1.52 億美元，並從 2023 年開始定期進行季度債務攤銷。

For the PPL loans, we have an agreement to extend to May 2025, with peak interest continuing to March 2023, and thereafter the regular interest payments. The extension also includes debt repayments and amortization starting in 2023, together with a repayment plan for the capitalized interest. In addition, we have also undertaken to sell one of the financed rigs by November 2022. For Keppel, we have entered into an LOI to sell 3 new build for a total consideration of $320 million, which will relieve the company of capital commitments. The company has to pay an additional $32.6 million above the sale price to Keppel, which consists of remaining delivery installments, not covered by the sale price and previously accrued costs for delaying delivery dates of the rigs. The existing capital loan facilities remains with maturities in 2025 and 2026 as before.

對於 PPL 貸款，我們已達成協議延長至 2025 年 5 月，最高利息將持續至 2023 年 3 月，此後將定期支付利息。延期還包括從 2023 年開始的債務償還和攤銷，以及資本化利息的償還計劃。此外，我們還承諾在 2022 年 11 月之前出售其中一個融資鑽井平台。對於吉寶，我們已簽訂意向書，出售 3 座新建鑽井平台，總對價為 3.2 億美元，這將減輕公司的資本承諾。該公司必須向吉寶支付高於銷售價格的 3260 萬美元，其中包括剩餘的交付分期付款，不包括在銷售價格和先前因延遲鑽井平台交付日期而產生的成本中。現有的資本貸款安排與以往一樣，將在 2025 年和 2026 年到期。

And finally, the 2 remaining newbuilds on order has been postponed to 2025. These rigs have financing attached of $130 million per rig, which will mature in 2029. The $350 million convertible bond is expected to be refinanced ahead of its maturity in May 2023 through a combination of cash from operations, or asset sales and refinancing or equity. We have already received an indicative term sheet proposal for a new $250 million convertible bond. Principal agreements have been reached with all the creditors and final agreements are still subject to creditors' Board approvals and binding documentation, and there is a potential for final terms to be different. Full details of the refinancing is disclosed in the Q2 2022 earnings report published by the company August 9, 2022. Then I hand it back to Patrick.

最後，剩餘的 2 座新訂單已推遲至 2025 年。這些鑽井平台的融資額為每台鑽井平台 1.3 億美元，將於 2029 年到期。預計 3.5 億美元的可轉換債券將在 2023 年 5 月到期之前進行再融資，直至來自經營活動、資產出售和再融資或股權的現金組合。我們已經收到了一份關於新的 2.5 億美元可轉換債券的指示性條款清單提案。已與所有債權人達成主要協議，最終協議仍需獲得債權人董事會的批准和具有約束力的文件，最終條款可能會有所不同。再融資的全部細節在公司 2022 年 8 月 9 日發布的 2022 年第二季度收益報告中披露。然後我將其交還給帕特里克。

Thank you, Magnus. As can be seen from the graph, there have been significant dayrate increases in the past when utilization was approaching the 95%. This is very similar to the situation that we are currently in after the large tenders in the Middle East. As a result, day rates are increasing meaningfully as evidenced by our recent awards and extensions in Africa and Asia with recent fixtures being over $130,000 per day. We are confident that the current commodities price levels in combination with the structurally undersupplied oil and gas market is the right foundation for a long-term and strong bull market for the modern jack-up rigs.

謝謝你，馬格努斯。從圖中可以看出，過去當利用率接近 95% 時，日費率顯著增加。這與我們目前在中東大型招標後所處的情況非常相似。因此，我們最近在非洲和亞洲獲得的獎項和延期證明了日費率正在顯著增加，最近的固定裝置每天超過 130,000 美元。我們相信，當前的大宗商品價格水平以及結構性供應不足的石油和天然氣市場是現代自升式鑽井平台長期強勁牛市的正確基礎。

Next slide. Utilization of the modern jack-up fleet, this is the rigs build after 2000, has now surpassed 92%, representing an increase of 10 percentage points year-to-date, and we expect this to soon reach 95% as certain ongoing tenders are being awarded. With the tight availability of marketed rigs, a limited number of new build left at shipyards and opportunities to deploy additional rigs presenting themselves on a weekly basis, we reiterate our belief that demand for modern jack-ups is expected to outstrip supply in the coming quarters.

下一張幻燈片。現代自升式船隊的使用率，即 2000 年後建造的鑽井平台，現已超過 92%，較年初至今增加了 10 個百分點，我們預計這一比例將很快達到 95%，因為某些正在進行的招標被授予。由於已上市鑽井平台的供應緊張，造船廠剩餘的新建造數量有限，以及每週部署更多鑽井平台的機會，我們重申我們相信現代自升式鑽井平台的需求預計將在未來幾個季度超過供應.

Next slide. The Middle East is expected to be the main source of oil production growth. With the demand in the Middle East and also China, we are already approaching full utilization of the fleet. There will be demand in the rest of the world, especially considering the increased focus on energy security. In total, these regions are currently having a rig count of about 100 below the recent peak. Given the strength in the market, several of these customers will likely have to wait before getting access to drilling equipment. Magnus will now show you the details for the Borr Drilling rig fleet.

下一張幻燈片。預計中東將成為石油產量增長的主要來源。隨著中東和中國的需求，我們已經接近充分利用機隊。世界其他地區將會有需求，特別是考慮到對能源安全的日益關注。總的來說，這些地區目前的鑽機數量比最近的峰值低約 100 台。鑑於市場的實力，其中一些客戶可能需要等待才能獲得鑽井設備。 Magnus 現在將向您展示 Borr Drilling 鑽機車隊的詳細信息。

Thanks, Patrick. Since the first quarter 2022 report, the company secured new contract extensions, LOA, LOIs, for its active rigs, the Thor, Idun, Mist, Iden and Prospector 5. This maintains the company's contracted or committed fleet at 20 units, which is represented by 4 in West Africa, 1 in North Sea, 3 in the Middle East, 6 in Southeast Asia and 6 in Mexico. Year-to-date, the company has been awarded 14 new contracts, extensions, exercise options, LOAs and LOIs, representing 5,600 days or 15.4 years and $650.2 million of potential backlog, excluding options.

謝謝，帕特里克。自 2022 年第一季度報告以來，該公司為其在役鑽井平台 Thor、Idun、Mist、Iden 和 Prospector 5 獲得了新的合同延期、LOA、LOI。這使公司的合同或承諾船隊保持在 20 個單位，代表西非4個，北海1個，中東3個，東南亞6個，墨西哥6個。年初至今，該公司已獲得 14 份新合同、延期、行使期權、LOA 和 LOI，代表 5,600 天或 15.4 年以及 6.502 億美元的潛在積壓，不包括期權。

During the same period, our operating rigs have consumed approximately 8.8 years of backlog, which translates to a backlog replenishment ratio in 2022 at a multiple of 1.75. These calculations include contracts through our drilling JVs on 100% basis in addition to any mobilization compensation in the contracts.

在同一時期，我們的鑽井平台消耗了大約 8.8 年的積壓，這意味著 2022 年的積壓補充率為 1.75 倍。除了合同中的任何動員補償外，這些計算還包括 100% 通過我們的鑽井合資企業簽訂的合同。

Moving to the next slide. One of the most valuable aspects of Borr Drilling is the ability to start generating large amounts of cash once we get all our rigs working. This slide is an updated version of what we had in our previous presentations too, and shows the high cash generation potential of the company at various day rate levels. The recent increase in day rates for our rigs provide a significant cash flow potential for the company that we aim to return to our shareholders in the future. The company has recently secured contracts with day rates of about $130,000 per day, which is far above our anticipated cash flow breakeven levels of approximately $95,000 per day.

轉到下一張幻燈片。 Borr Drilling 最有價值的方面之一是，一旦我們的所有鑽機都開始工作，就能夠開始產生大量現金。這張幻燈片也是我們之前演示文稿的更新版本，展示了公司在不同日費率水平下的高現金生成潛力。最近我們鑽井平台日費率的提高為公司提供了巨大的現金流潛力，我們的目標是在未來回報給我們的股東。該公司最近獲得了每天約 130,000 美元的日費率合同，這遠高於我們預期的每天約 95,000 美元的現金流盈虧平衡水平。

If our entire fleet had average day rate of $131,000 per day, we have potential annual EBITDA generation above $600 million for 24 rigs. Applying our assumption for debt service and CapEx levels in 2024, pretax cash flow to equity is shown illustratively at around $300 million. Looking at historical day rate levels. For instance, the average day rates between 2006 and 2014 of $175,000 per day, we see illustrative EBITDA of close to $1 billion and pretax free cash flow to equity above $650 million.

如果我們整個船隊的平均日費率為每天 131,000 美元，那麼 24 台鑽機的年 EBITDA 潛在收入將超過 6 億美元。應用我們對 2024 年償債和資本支出水平的假設，股權的稅前現金流量顯示為約 3 億美元。查看歷史日利率水平。例如，2006 年至 2014 年間的平均日費率為每天 175,000 美元，我們看到 EBITDA 接近 10 億美元，稅前自由現金流量超過 6.5 億美元。

Moving to the next slide. This is also an illustrative slide, but to put things in perspective. With current enterprise value, Borr Drilling is implicitly priced at $114 million per rig. This is a significant discount to newbuild prices and similar to recent asset transactions we have seen in the market. In an undersupplied market, one would expect values to move in the direction of newbuild parity. And this table shows you the potential scenarios based on various market values for our share price. On the right-hand side, we are showing illustrative EV over EBITDA ratios given different day rate assumptions. Based on current contract rates achieved of around $131,000 per day, the EV/EBITDA multiple of the company will be 4.4%. Based on the average rate seen in the cycle, that multiple drops to 2.8x and even further to 1.8x at peak dayrate seen in the previous slide. With that, I'll move back to Patrick.

轉到下一張幻燈片。這也是一張說明性幻燈片，但要正確看待事物。以目前的企業價值計算，Borr Drilling 的隱含價格為每台鑽機 1.14 億美元。這與新建船價格相比有很大折扣，類似於我們在市場上看到的近期資產交易。在供應不足的市場中，人們預計價值將朝著新建平價的方向發展。這張表向您展示了基於我們股價的各種市場價值的潛在情景。在右側，我們展示了不同日費率假設下的說明性 EV 與 EBITDA 比率。根據目前每天約 131,000 美元的合同費率，該公司的 EV/EBITDA 倍數將為 4.4%。根據周期中看到的平均比率，該倍數下降至 2.8 倍，在上一張幻燈片中看到的峰值日率甚至進一步下降至 1.8 倍。有了這個，我會回到帕特里克。

Thank you, Magnus. So in conclusion, the multiyear underinvestment in the oil and gas industry means that production increases as are required today to meet the demand for oil and gas are very drilling intensive. The largest resource holders worldwide have started to increasingly develop the shallow water fields, which results in a high demand for premium assets. In return, pushing utilization to levels where day rates are expanding rapidly. Without further additions to the rig fleet, mainly because there are only a few new builds left at the yard and no new orders being placed, it's unlikely that the tightness in the market will soon disappear, which is the basis for our view that we are in a multiyear up cycle.

謝謝你，馬格努斯。因此，總而言之，石油和天然氣行業的多年投資不足意味著今天為滿足石油和天然氣需求而增加的產量是非常密集的鑽探活動。全球最大的資源持有者已開始越來越多地開發淺水油田，這導致對優質資產的高需求。作為回報，將利用率提高到日費率迅速擴大的水平。在沒有進一步增加鑽井平台的情況下，主要是因為船廠只剩下幾艘新船，沒有新訂單下達，市場緊張的局面不太可能很快消失，這是我們認為我們的基礎在一個多年的上升週期中。

Based on the market outlook for our available rigs, already contracted revenue and operating costs, we anticipate generating $290 million to $330 million, adjusted EBITDA in 2023 with an early estimate to double this number again in 2024. This would put us firmly in a position to consider cash distribution to shareholders at that time. With this, we trust we have given you a clear view of our expectations for the remainder of 2022 and beyond. And I hope you share our enthusiasm when it comes to the upside potential. Ladies and gentlemen, thank you very much.

根據我們可用鑽機的市場前景、已簽約的收入和運營成本，我們預計 2023 年調整後的 EBITDA 將在 2.9 億美元至 3.3 億美元之間產生，早期估計該數字將在 2024 年再次翻番。這將使我們處於有利地位考慮當時向股東分配現金。有了這個，我們相信我們已經讓您清楚地了解了我們對 2022 年剩餘時間及以後的期望。我希望你能分享我們對上行潛力的熱情。女士們先生們，非常感謝你們。

We are pleased to announce that we are continuing to progress on the refinancing with our secured creditors where agreements in principle has been reached to extend the debt maturing in 2023 to 2025. This includes the current bank facility, we have contemplated refinancing with 2 new facilities provided by the current lenders and secured by the same rates providing security today. For the Heidrun facility, we have an agreement to extend the loans to January 2025 in return for some down payments in 2022, down to a loan balance of approximately $152 million and regular quarterly debt amortization starting in 2023.

我們很高興地宣布，我們正在繼續與我們的有擔保債權人進行再融資，原則上已達成協議，將 2023 年到期的債務延長至 2025 年。這包括目前的銀行融資，我們已考慮通過 2 項新融資進行再融資由當前的貸方提供，並以今天提供安全的相同利率擔保。對於 Heidrun 設施，我們已達成協議將貸款延長至 2025 年 1 月，以換取 2022 年的部分首付，貸款餘額降至約 1.52 億美元，並從 2023 年開始定期進行季度債務攤銷。

For the PPL loans, we have an agreement to extend to May 2025, with peak interest continuing to March 2023, and thereafter the regular interest payments. The extension also includes debt repayments and amortization starting in 2023, together with a repayment plan for the capitalized interest. In addition, we have also undertaken to sell one of the financed rigs by November 2022. For Keppel, we have entered into an LOI to sell 3 new build for a total consideration of $320 million, which will relieve the company of capital commitments. The company has to pay an additional $32.6 million above the sale price to Keppel, which consists of remaining delivery installments, not covered by the sale price and previously accrued costs for delaying delivery dates of the rigs. The existing capital loan facilities remains with maturities in 2025 and 2026 as before.

對於 PPL 貸款，我們已達成協議延長至 2025 年 5 月，最高利息將持續至 2023 年 3 月，此後將定期支付利息。延期還包括從 2023 年開始的債務償還和攤銷，以及資本化利息的償還計劃。此外，我們還承諾在 2022 年 11 月之前出售其中一個融資鑽井平台。對於吉寶，我們已簽訂意向書，出售 3 座新建鑽井平台，總對價為 3.2 億美元，這將減輕公司的資本承諾。該公司必須向吉寶支付高於銷售價格的 3260 萬美元，其中包括剩餘的交付分期付款，不包括在銷售價格和先前因延遲鑽井平台交付日期而產生的成本中。現有的資本貸款安排與以往一樣，將在 2025 年和 2026 年到期。

And finally, the 2 remaining newbuilds on order has been postponed to 2025. These rigs have financing attached of $130 million per rig, which will mature in 2029. The $350 million convertible bond is expected to be refinanced ahead of its maturity in May 2023 through a combination of cash from operations, or asset sales and refinancing or equity. We have already received an indicative term sheet proposal for a new $250 million convertible bond. Principal agreements have been reached with all the creditors and final agreements are still subject to creditors' Board approvals and binding documentation, and there is a potential for final terms to be different. Full details of the refinancing is disclosed in the Q2 2022 earnings report published by the company August 9, 2022.

最後，剩餘的 2 座新訂單已推遲至 2025 年。這些鑽井平台的融資額為每台鑽井平台 1.3 億美元，將於 2029 年到期。預計 3.5 億美元的可轉換債券將在 2023 年 5 月到期之前進行再融資，直至來自經營活動、資產出售和再融資或股權的現金組合。我們已經收到了一份關於新的 2.5 億美元可轉換債券的指示性條款清單提案。已與所有債權人達成主要協議，最終協議仍需獲得債權人董事會的批准和具有約束力的文件，最終條款可能會有所不同。再融資的全部細節在公司 2022 年 8 月 9 日發布的 2022 年第二季度收益報告中披露。

Ladies and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect your lines.

女士們，先生們，今天的電話會議到此結束。感謝您的加入。您現在可以斷開線路。