Q2 2026 Paratus Energy Services Ltd Earnings Call Transcript
Key Points
- Successfully completed the strategic sale of Fontis' drilling operations and jack-up fleet for $400 million, significantly reducing net debt to $250 million pro forma and leverage to 1.6 times EBITDA.
- Received approval for Extended Dry-Docking regime up to 20 years for five PLSVs, reducing lifetime CapEx and increasing earnings potential by avoiding off-hire periods.
- Reported strong first half 2026 results with net income of $28 million, up from $3 million year-over-year, driven by higher day rates and fewer off-hire days.
- Maintained a solid liquidity position with pro forma cash of $305 million, supported by stable distributions from Seagems.
- Continued shareholder returns with a quarterly dividend of $0.22 per share, totaling approximately $350 million returned since 2024.
- Seagems delivered a solid Q2 with $142 million revenue and 64% EBITDA margin, and backlog remains strong at $1.1 billion.
- PLSV fleet technical utilization declined to 93% in Q2 from 98% in Q1 due to maintenance and operational incidents involving Esmeralda and Jade.
- Q2 revenues and adjusted EBITDA decreased sequentially to $71 million and $42 million, respectively, from $75 million and $46 million in Q1.
- Seagems' Q2 EBITDA declined quarter-over-quarter due to maintenance activities and operational incidents, impacting earnings.
- The company faces uncertainty regarding the Petrobras PLSV tender, with negotiations ongoing and no concrete outcome or timing disclosed.
- Jade's contract is expected to roll off in August 2027, and while an extension is likely, it is not guaranteed, posing a potential gap in utilization.
- The use of proceeds from the Fontis sale is still under evaluation, with no decision made on whether to repay debt or reinvest, creating uncertainty for investors.
Thank you, Elma. Good day, everyone, and welcome to this second quarter and half year 2026 results presentation for Paratus Energy Services Limited. My name is Baton Haxhi-mehmedi, and I'm the Interim CEO and CFO of Paratus.
Before we begin today's presentation, I would like to remind all participants that some of the statements on this call may involve forward-looking statements. Forward-looking information involves risks and uncertainties by nature that may cause actual results to differ materially from those projected in such statements. I therefore refer you to our latest public filings.
The second quarter of '26 and the period since have been eventful for Paratus. On July 29, we successfully completed the strategic sale of Fontis' drilling operations and jack-up fleet for a total consideration of $400 million.
At completion, Paratus received approximately $163 million in cash and $237 million of seller credit with a term of 2.5 years, structured with interest rate
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