Diamond Offshore Drilling Inc (DO, Financial) released its third-quarter earnings report on November 7, 2023. The company reported a decrease in revenue from $282 million in the second quarter to $245 million in the third quarter of 2023. The net loss for the quarter was $145 million, compared to a net income of $238.7 million in the previous quarter. Adjusted EBITDA was reported at $27.7 million, down from $36.2 million in Q2 2023.
Financial Highlights
The company's operating income for the third quarter was $863,000, a significant decrease from $10.2 million in the previous quarter. The loss per diluted share was $1.42, compared to an income per diluted share of $2.29 in Q2 2023. The company also announced contract awards worth $240 million, increasing the backlog to $1.6 billion.
According to Bernie Wolford, Jr., President and Chief Executive Officer of Diamond Offshore, the company continues to benefit from improving energy industry fundamentals. He stated,
As we enter the fourth quarter, we see a continuation of positive indicators of a strong and lasting upcycle, including growing rig demand, increased investment in offshore upstream projects, and shrinking rig availability."
Operational and Financial Performance
The decrease in revenue quarter-over-quarter was primarily driven by the completion of the Ocean BlackHawk’s Senegal contract and the Ocean Patriot being between contracts. This was partially offset by the Ocean Apex’s return to work after completion of its second quarter shipyard projects and special survey.
The company's contract drilling expense for the third quarter was $182 million, a $31.0 million decrease from the prior quarter. This was largely due to lower operating costs and the deferral of certain costs associated with the Ocean BlackHawk’s shipyard activities. General and administrative expenses were $17 million in the third quarter, in line with the prior quarter.
Balance Sheet and Cash Flow
As of September 30, 2023, the company had cash and cash equivalents of $146.8 million. The company completed a refinancing transaction that resulted in the issuance of $550 million of senior secured second lien notes at a lower interest rate and later maturity date than its previously outstanding debt. This has strengthened the company's balance sheet and improved its liquidity position.
Looking Ahead
Diamond Offshore Drilling Inc (DO, Financial) continues to see positive indicators for a strong and lasting upcycle in the energy industry. With the announcement of new contract awards and a growing backlog, the company is well-positioned to capitalize on these opportunities.
Explore the complete 8-K earnings release (here) from Diamond Offshore Drilling Inc for further details.
