Seadrill Ltd (SDRL, Financial) announced its financial results for the fourth quarter and full year of 2024, reporting a net income of $446 million and an Adjusted EBITDA of $378 million. The company secured long-term contracts for its rigs, West Jupiter and West Tellus, adding $1 billion to its backlog. Additionally, Seadrill exited the benign jack-up market by divesting West Prospero for $45 million and repurchased $100 million of shares in the fourth quarter. The company ended the year with a cash balance of $505 million. The press release was issued on February 26, 2025.
Positive Highlights
- Net income of $446 million for 2024.
- Secured $1 billion in backlog through new contracts with Petrobras.
- Repurchased $100 million in shares, totaling $792 million since September 2023.
- Maintained a strong cash balance of $505 million.
Negative Highlights
- Operating revenues decreased by 18% in Q4 compared to the previous quarter.
- Adjusted EBITDA dropped to $28 million in Q4 from $93 million in Q3.
- Free Cash Flow was negative $31 million in Q4.
Financial Analyst Perspective
Seadrill Ltd's financial performance in 2024 demonstrates robust profitability with a significant net income of $446 million. The company's strategic focus on securing long-term contracts has bolstered its backlog, providing revenue visibility into 2029. However, the decline in operating revenues and Adjusted EBITDA in the fourth quarter indicates potential challenges in maintaining operational efficiency. The share repurchase program reflects confidence in the company's valuation, but the negative Free Cash Flow suggests a need for careful cash management moving forward.
Market Research Analyst Perspective
Seadrill Ltd's strategic divestment from the benign jack-up market and focus on deepwater drilling aligns with industry trends favoring high-specification rigs. The $1 billion contract with Petrobras underscores the demand for Seadrill's advanced drilling capabilities. Despite the quarterly revenue dip, the company's strong backlog and cash position provide a buffer against market volatility. The ongoing share repurchase program may enhance shareholder value, but the company must address operational challenges to sustain growth.
Frequently Asked Questions (FAQ)
Q: What was Seadrill's net income for 2024?
A: Seadrill reported a net income of $446 million for 2024.
Q: How much did Seadrill add to its backlog in 2024?
A: Seadrill added $1 billion to its backlog through new contracts.
Q: What was the cash balance at the end of 2024?
A: Seadrill ended 2024 with a cash balance of $505 million.
Q: How much did Seadrill repurchase in shares during the fourth quarter?
A: Seadrill repurchased $100 million in shares during the fourth quarter.
Read the original press release here.
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