The drillship Rowan Renaissance; Source: Company website.
I commented on July 3, 2016, regarding the July 1, 2016 fleet status.
Click here for the most recent conference call.
2Q'16 results (7 consecutive quarters).
|Q2 2016||Q1 2016||Q4 2015||Q3 2015||Q2 2015||Q1 2015||Q4 2014|
in $ Million
Contract drilling expense
in $ million
in $ million
in $ million
Shares Outstanding basic
Cash and Cash equivalent
in $ Million
Non-cash impairment charge
* Per press release: Net income for the current quarter included a $120.0 million, or $0.95 per share, after-tax increase to net income for the Rowan Relentless contract termination and related items. The $120.0 million reflects the amount in excess of the Rowan Relentless drillship's day rate for the three months ended June 30, 2016.
Fleet status report snapshot:
Note: backlog estimated in August 1, 2016, is $2.43 billion.
The last fleet status report was on July 1, 2016 and I commented on July 3. Please review items by reading this preceding article, especially about the Rowan Resolute blend & extend with Anadarko.
A new contract extension announced at the conference call by M. Marc A Keller, VP Marketing:
Additionally, we're pleased to announce that we have extended the contract on the Gorilla V with Total in the North Sea for approximately eight months plus an option period.
I assumed first that the 8-month contract extension will have a lower day rate at about $135k/d, from the actual $175k/d until end of August. M. Keller did not specify the new day rate immediately at the conference call, but when asked again in the Q&A he said finally:
but I'll just tell you it's below $100,000 but it's above our OpEx. I'm not trying to be coy or vague on it. We're just in a very competitive situation with a lot of other rigs and so we're really happy the Total has continued to extend the rig.
Also, RDC is still negotiation with Cobalt.
|RDC 8/1/2016||2016||2017||2018||2019||2020||2021||2022||2023||2024||D rate + Mob.|
|Rowan Gorilla IV||5||0||0||0||0||0||0||0||0||73|
|Rowan Gorilla V||5||4||0||0||0||0||0||0||0||95|
|Rowan Gorilla VI||5||12||3||0||0||0||0||0||0||362|
|Rowan Gorilla VII||5||0||0||0||0||0||0||0||0||181|
|Rowan EXL II||5||3||0||0||0||0||0||0||0||180|
Rowan Companies released its 2Q'16 on August 3, 2016. It was another impressive quarter with $611.9 million in revenue -- $485 million excluding special items -- up 22.3% quarter over quarter. Net income was $216.7 million or $1.71 per share. Excluding special items (Rowan Relentless) net income was $94.9 million or $0.75 per share.
As we can see in the chart above, RDC is delivering a perfect score, based on the Adjusted EBIDTA for the last 7 quarters. Despite an extremely challenging environment in the offshore drilling industry.
M. Steven M. Butz, CFO, said in the conference call:
Our exceptional financial performance continued in the second quarter despite strong market-related headwinds. Even when excluding the positive impact of the contract termination for the Relentless on our second quarter results, our adjusted EBITDA margin of 52% was nearly on par with the record margin that we generated in the first quarter. We further strengthened our balance sheet by generating $166 million of cash even after retiring $31 million of debt.
Due to the Rowan Relentless the operating costs for 2016 has been revised lower to $795 million from $805 million. Also the company is reducing its full year CapEx guidance by $25 million to a new range of $145 million to $155 million.
RDC is a very good company, one of the best in the offshore industry sector that should be considered as a long-term investment. Good balance sheet, good client base, managing debt properly and have long experience in the field.
Yes, the market is terrible, so what? It is in these special situations that savvy investors are building cheap holdings.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.