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Archer Limited: First Quarter 2020 Trading Update

Hamilton, Bermuda (May 8, 2020)

First quarter 2020

  • Revenue of $237.1 million
  • Strong operational results for Q1 2020 with EBITDA before exceptional items of $28.1 million
  • Refinancing closed with maturity of main facility in Q4 2023
  • Modular rigs mobilized for operations in New Zealand and Norway
  • Covid-19 and oil price reduction impacting client activity

Dag Skindlo, CEO of Archer comments:

“We saw a reduction in activity towards the end of March in most of our business areas following the spread of the COVID-19 and the oil price drop.  Archer has since the virus emerged, monitored the situation closely to ensure the safety of our colleagues, customers and the communities in which we operate, while continuously delivering efficient operations to our customers.

Offshore operators have announced 20-30% investment cut for 2020, which gives an immediate impact on Archer activity across our global divisions. Furthermore, the lockdown in Argentina has resulted in a situation where approximately 75% of our employees are in their homes with reduced compensation. In order to mitigate the impact of the reduced activity, we have effectuated a series of cost reduction initiatives including reduction in our work force and postponement of investments.

Following the closing of the refinancing in April, Archer has adequate levels of liquidity available.  Sufficient liquidity combined with our expectation that we will remain cash flow positive, enables us to withstand a meaningful drop in activity.”

Archer financial outlook 2020

In the current environment there is significant uncertainty related to forecasting, and our main financial priorities are cost alignment to the reduced activity and safeguarding our liquidity. Given the significant market uncertainty we find it challenging to provide guidance, however we currently estimate the following outcome for 2020;

  • Annual revenue to be reduced by approximately 20-25% compared to 2019
  • Positive free cash flow in 2020
  • NIBD at $525-535 million at the end of 2020, down approximately 10% from end of 2019
  • In Q2 we will record a gain related to the refinancing of $45 million, partly offset by expected impairment charges of $15-20 million

In connection with the Trading Update, a conference call will be held at 8:00 am London time, 9:00 am Oslo time on May 8, 2020.

To listen to the conference call, the following options are available:

A. Webcast

To register for the webcast please go to 

B. Conference call

To access the call, which is open to the public, please contact the conference call operator at the participant telephone numbers listed below. Please call in 10 minutes prior to the scheduled start time, and ask for the “First Quarter 2020 Trading Update call”

Norway:                               +47 21 95 63 42

UK:                                         +44 203 769 6819

USA:                                      + 1 917 962 0650

Participant pincode: 404874

This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.