Q4 2024 Nabors Industries Ltd Earnings Call Transcript
Key Points
- Nabors Industries Ltd (NBR) reported a strong performance in international markets, with 10 international rigs activated in 2024 and plans for 10 more deployments in 2025.
- The company's technology-focused businesses, NDS and Rigtech, generated a combined EBITA of more than $43 million, with their contribution increasing to 19.5% of the company's consolidated EBITA.
- Nabors Industries Ltd (NBR) is optimistic about incremental rig awards in key geographies, which are expected to deploy in 2026.
- The company has a strategic partnership with Saudi Aramco, with a new build rig program that ensures a return on invested capital in 5 years, providing long-term stability.
- Nabors Industries Ltd (NBR) is confident in realizing annualized cost synergies of at least $35 million in 2025 from the Parker acquisition, which is expected to be accretive to free cash flow.
- Free cash flow fell short in the fourth quarter due to substantial receivables in Mexico and accelerated milestone payments in Saudi Arabia.
- The lower 48 market has not improved as anticipated, impacting the company's drilling rigs and NDS businesses.
- Significant delays in payments from a customer in Mexico, amounting to approximately $50 million, have affected cash flow.
- The ongoing investment in Saudi Arabia is significant, with a forecasted negative free cash flow of approximately $150 million from the SAA segment in 2025.
- The US market remains sluggish, with a lack of growth in the lower 48 market and an expected 4% reduction in rig count by major clients.
Good day and welcome to the Nabors fourth-quarter 2024 earnings conference call. (Operator Instructions) Please note that this event is being recorded.
I would now like to turn the conference over to William Conroy, Vice President of Investor Relations. Please go ahead.
Good morning, everyone.
Thank you for joining Neighbor's 4th quarter 2024 earnings conference call.
Today we will follow our customary format with Tony Petrello, our Chairman, President and Chief Executive Officer, and William Restrepo, our Chief Financial Officer, providing their perspectives on the quarter's results, along with insights into our markets and how we expect neighbors to perform in these markets.
In support of these remarks, a slide deck is available, both as a download within the webcast and in the investor relations section of Neighbors.com.
Instructions for the replay of this call are posted on the website as well.
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