Hamilton, Bermuda (February 14, 2020)
Archer increased the 2019 fourth quarter revenue to NOK 239.7 million, an increase of 3 percent compared with the fourth quarter 2018, and delivered the best full year EBIT earnings since 2010.
Fourth quarter highlights 2019
- Revenue of $239.7 million
- EBITDA pre-exceptional items of $27.5 million
- EBIT of $8.3 million
- Net interest bearing debt reduced by $25 million to $582 million
- Positive net income of $3.9 million
- Significant backlog to support activity growth in 2020
Kjell-Erik Østdahl, Executive Chairman of Archer comments:
“The fourth quarter showcases the resilience of Archer as we delivered stable earnings and generated strong cash flow, while at the same time reducing our net interest bearing debt despite a high investment level. On a year over year basis, we improved EBITDA by 30% and increased EBIT by 170%. We grew the EBITDA margin from 8.1% to 10.2% as our improvement agenda materialized.
We had a quarter with strong order intake from both Platform Drilling and Land Drilling, with extension of our Platform Drilling contract with Equinor in Brazil and a $200 million new contract with YPF for drilling in Vaca Muerta.
Furthermore, we received an LOI to for multiyear operation of modular rig Archer Topaz. A successful award of this contract will secure the rig working until 2023/2024, a key milestone and showcases the value of our modular rigs in permanently plugging and abandoning late life assets.
Archer proactively reduced its workforce to match new drilling activity as Argentina experienced changing political landscape and macroeconomic challenges. Operators in country are still in a wait and see mode, and are hesitant to increase investments until more clarity on future plans prevail. Archer continues to monitor and adapt to the situation in country.”
Archer expects improved 2020 financials
- Revenue in 2020 at the same level as in 2019
- EBITDA to improve on change in product mix and less restructuring cost (margin of 10-12%)
- Capex 3-4% of revenue
- Reduced interest expenses
- Reduced NIBD and improved NIBD/EBITDA ratio
Final refinancing solution expected to be concluded in Q1
- We are in the closing stages of the process to conclude an amend and extend solution with our senior lenders
Webcast and Conference call details
A conference call will be held at 08:00 London time, 09:00 Oslo time on February 14, 2020. To listen to the conference call, the following options are available:
A. Webcast
To register for the webcast please go to https://archer.eventcdn.net/2019fy/
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 “Fourth Quarter 2019 Earnings Release, Outlook 2020 and Refinancing update”
Participant Telephone Numbers:
| Norway: | +47 23 50 02 43, PIN: 68159816# |
| UK: | +44 (0) 333 300 9271 |
| USA: | +1 833-526-8380 |
The operator will ask for your name and company. Following the presentation there will be a Q&A session. Information on “how to ask questions” will be given at the beginning of the Q&A session.
For additional information please contact:
Dag Skindlo, Chief Financial Officer
Mobile: +47 982 26 624, Email: dag.skindlo@archerwell.com
This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.