Paratus Reports Q3 2024 Results, Reaffirms Commitment to Shareholder Returns

HAMILTON, Bermuda, Nov. 29, 2024 /PRNewswire/ -- Paratus Energy Services Ltd. (Oslo: PLSV) ("Paratus" or the "Company") today reported operational and financial results for the third quarter of 2024, highlighted by $110 million in revenues and $63 million in adjusted EBITDA. At quarter-end, the Group held $165 million in cash deposits and had a net debt balance of $597 million.

Building on the momentum established by the inaugural quarterly cash distribution to shareholders for the second quarter, Paratus is pleased to announce that the Board of Directors ("Board") has authorized a cash distribution to shareholders of $0.22 per share for the third quarter of 2024. This distribution reflects the continued confidence in the Company's financial strength and commitment to creating long-term value for shareholders.

"Paratus is delivering on our commitment to return a majority of our excess free cash in the form of stable distributions to shareholders." said Robert Jensen, CEO of Paratus. "Including this distribution, we will have returned more than 10% of our current market cap to shareholders since early September. This is a testament to our strong balance sheet and solid operational performance this year, and highlights Paratus' differentiated capital returns program."

(Note: numbers below are based on management reporting)

Key highlights

• Revenues of $110 million, including $8 million of variable revenue previously not recognized in Mexico.
• EBITDA of $63 million on the back of solid operational performance and cost discipline. EBITDA excluding variable revenue in Mexico was $54 million broadly in line with the previous quarter ($55 million).
• Reported net loss of $15 million was primarily due to a one-time, non-cash accounting expense of $35 million related to the partial redemption of the 2026 Notes. Excluding this item, the Company generated net income of $20 million.
• Exited the quarter with Group cash balance of $165 million and $597 million in net debt.
• Seagems secured $32 million additional backlog for Esmeralda and Fontis dayrates were adjusted up 4% following contractual market indexation, effective August.
• In October 2024, Paratus invested $12 million (its pro-rata share) in a private placement of Archer to support a strategic acquisition transaction.
• In November 2024, Paratus successfully uplisted onto the Euronext Oslo Børs.
• In November 2024, the Board of Directors authorized a cash distribution to shareholders of $0.22 per share for the third quarter of 2024, in line with the previous quarter.

Fontis

Fontis recorded total revenues of $63 million (Q2 2024: $72 million) including $8 million (Q2 2024: $15 million) in recognition of variable revenue from previously unbilled services that were agreed with the customer. Operating expenses (Opex) were $23 million, which was lower than the previous quarter (Q2 2024: $24 million), and general and administrative expenses (G&A) were $1 million, in line with the previous quarter (Q2 2024: $1 million). Adjusted EBITDA was $39 million compared to $47 million in Q2 2024 primarily due to a smaller portion of variable revenue from previously unbilled services compared to Q2 2024. For informational purposes, EBITDA generated during the quarter excluding variable revenues, was $31 million, which was largely in line with the previous quarter (Q2 2024: $32 million), despite the planned downtime of the Courageous for 58 days during the quarter due to the installation of a new crane. 

In Q3 2024, Fontis achieved an average dayrate of $135.1 thousand per day (Q2 2024: $126.7 thousand per day) and an average technical utilization of 99.0% (Q2 2024: 99.8%), closing the quarter with a contract backlog of $317 million.

At the end of Q3 2024, the notional amount of the accounts receivable was $283 million, up from $215 million in Q2 2024. Fontis collected $106 million of receivables during the first nine months of 2024, including $90 million in Q2 2024. No payments have been received since the start of the third quarter, consistent with trends amongst other similar service companies in Mexico, causing receivables to rise with billed and accrued revenues. Additionally, $29 million was invoiced for previously unbilled services, further increasing the receivables balance. The Company has noted that the Mexican government has publicly expressed plans to support Fontis' customer, including direct financial assistance and a tax reform to help the customer address its financial obligations and achieve operational efficiencies. The Company, leveraging over a decade-long relationship, has booked revenues of around $825 million and collected around $850 million since 2021, demonstrating strong collection resilience despite short-term fluctuations. The Company is actively engaging with the client to expedite the collection of outstanding receivables and expects to recover the full amount, as has been the case in the past, while acknowledging and planning for the possibility of ongoing fluctuations in the timing of collections. Consequently, the Company is also actively exploring alternative opportunities to potentially monetize part of its receivables balance of $283 million and will update the market accordingly if it enters any such transactions.

Seagems JV

The Company's 50% share in the JV contributed with $47 million in contract revenues (Q2 2024: $52 million) and $25 million in adjusted EBITDA (Q2 2024: $28 million). The decrease in revenue was mainly driven by lower average dayrate and lower average technical utilization. Operating expenses (Opex) were $17 million and general and administrative expenses (G&A) were $3 million, both largely in line with the previous quarter (Q2 2024: $17 million and $3 million, respectively).

The JV achieved an average contractual rate of $185.7 thousand per day (Q2 2024: $200.8 thousand per day) and an average technical utilization of 97.7% (Q2 2024: 99.3%). The lower average dayrate in Q3 2024 compared to Q2 2024 was mainly due to Jade and Onix operating under contracts with lower dayrates in the quarter, compared to spot contracts with higher dayrates in the previous quarter.

As previously announced, pursuant to an agreed plan amongst the JV shareholders, Seagems distributes all excess cash to its JV shareholders. During Q3 2024, the JV distributed $22 million to Paratus (Q2 2024: $14 million).

In September, Seagems received the 2024 Petrobras Best Supplier Award as the best Pipelaying Company. This is the third time in seven editions that the company receives this award.

(*) Figures reflect period between 2021-Q3 2024. Included in the $850 million figure is VAT and the nominal value of $196 million unsecured notes issued by the customer in lieu of cash settlement for an equivalent amount of outstanding Fontis accounts receivables. During 2022, Fontis sold these notes for $186 million.

Webcast and Q&A Session

Paratus will host a presentation of the Q3 2024 results via an audio webcast today at 15:00 CET. The presentation will be led by CEO Robert Jensen and CFO Baton Haxhimehmedi. A Q&A session will follow the presentation, with instructions on how to submit questions provided at the start of the session.

To join the webcast, please use the following link: https://channel.royalcast.com/landingpage/paratus-energy/20241129_2/

For further information, please contact:
Robert Jensen, CEO, Robert.Jensen@paratus-energy.com, +47 958 26 729
Baton Haxhimehmedi, CFO, Baton.Haxhimehmedi@paratus-energy.com, +47 406 39 083

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

Attachments

• Q3 2024 Interim Results Report
• Q3 2024 Interim Results Presentation

An updated company presentation is also available at the Company's website (www.paratus-energy.com).

About Paratus

Paratus Energy Services Ltd. (Oslo: PLSV) is an investment holding company of a group of leading energy services companies. The Paratus Group is primarily comprised of its ownership of Fontis and a 50/50 JV interest in Seagems (formerly Seabras). Fontis is an offshore drilling company with a fleet of five high-specification jack-up rigs working under contracts in Mexico. Seagems is a leading subsea services company, with a fleet of six multi-purpose pipe-laying support vessels under contracts in Brazil. In addition, Paratus is the largest shareholder in Archer Ltd, a global oil services company, listed on the Euronext Oslo Børs.

Forward-Looking Statements

This release includes forward-looking statements. Such statements are generally not historical in nature, and specifically include statements about the Company's and / or the Paratus Group's (including any member of the Paratus Group) plans, strategies, business prospects, changes and trends in its business and the markets in which it operates. These statements are based on management's current plans, expectations, assumptions and beliefs concerning future events impacting the Company and / or the Paratus Group and therefore involve a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, which speak only as of the date of this news release. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, management's reliance on third party professional advisors and operational partners and providers, the Company's ability (or inability) to control the operations and governance of certain joint ventures and investment vehicles, oil and energy services and solutions market conditions, subsea services market conditions, and offshore drilling market conditions, the cost and timing of capital projects, the performance of operating assets, delay in payment or disputes with customers, the  ability to successfully employ operating assets, procure or have access to financing, ability to comply with loan covenants, liquidity and adequacy of cash flow from operations of its subsidiaries and investments, fluctuations in the international price of oil or alternative energy sources, international financial, commodity or currency market conditions, including, in each case, the impact of pandemics and related economic conditions, changes in governmental regulations, including in connection with pandemics, that affect the Paratus Group, increased competition in any of the industries in which the Paratus Group operates, the impact of global economic conditions and global health threats, including in connection with pandemics, our ability to maintain relationships with suppliers, customers, joint venture partners, professional advisors, operational partners and providers, employees and other third parties and our ability to maintain adequate financing to support our business plans, factors related to the offshore drilling, subsea services, and oil and energy services and solutions markets, the impact of global economic conditions, our liquidity and the adequacy of cash flows for our obligations, including the ability of the Company's subsidiaries and investment vehicles to pay dividends, political and other uncertainties, the concentration of our revenues in certain geographical jurisdictions, limitations on insurance coverage, our ability to attract and retain skilled personnel on commercially reasonable terms, the level of expected capital expenditures, our expected financing of such capital expenditures, and the timing and cost of completion of capital projects, fluctuations in interest rates or exchange rates and currency devaluations relating to foreign or U.S. monetary policy, tax matters, changes in tax laws, treaties and regulations, tax assessments and liabilities for tax issues, legal and regulatory matters, customs and environmental matters, the potential impacts on our business resulting from climate-change or greenhouse gas legislation or regulations, the impact on our business from climate-change related physical changes or changes in weather patterns, and the occurrence of cybersecurity incidents, attacks or other breaches to our information technology systems, including our rig operating systems. Consequently, no forward-looking statement can be guaranteed.

Neither the Company nor any member of the Paratus Group undertakes any obligation to update any forward-looking statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for us to predict all of these factors. Further, we cannot assess the impact of each such factors on our businesses or the extent to which any factor, or combination of factors, may cause actual results to be materially different from those contained in any forward-looking statement.

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