On August 6, 2024, Diamond Offshore Drilling Inc (DO, Financial) released its 8-K filing for the second quarter of 2024. Diamond Offshore Drilling Inc is a leader in offshore drilling, providing contract drilling services to the energy industry around the globe with a fleet of offshore drilling rigs, semisubmersibles, and dynamically positioned drillships. It provides services geographically in the United States, Senegal, the United Kingdom, Australia, and Brazil.
Performance Overview
Diamond Offshore Drilling Inc reported total revenues of $252.89 million for Q2 2024, a decrease from $274.61 million in Q1 2024. The company posted a net income of $9.33 million, translating to an income per diluted share of $0.09. This is a decline from the previous quarter's net income of $11.61 million and income per diluted share of $0.11. The adjusted net income stood at $12.19 million, or $0.12 per diluted share, down from $25.43 million, or $0.25 per diluted share, in Q1 2024.
Financial Achievements and Challenges
Despite the decline in revenue and net income, Diamond Offshore Drilling Inc achieved an adjusted EBITDA of $58 million, which aligns with the company's guided range. The quarter also saw the recognition of $8.7 million in well-performance bonuses in Senegal, reflecting the exceptional performance of the company's deepwater drillships and their crews.
“We are pleased with our second quarter results, achieving adjusted EBITDA of $58 million, which is in line with our guided range. Our results for the quarter also include the recognition of $8.7 million in well-performance bonuses in Senegal, reflecting the exceptional performance of our deepwater drillships and the crews that operate them,” said Bernie Wolford, Jr., President and Chief Executive Officer of Diamond Offshore.
Income Statement Highlights
| Metric | Q2 2024 | Q1 2024 |
|---|---|---|
| Total Revenues | $252.89 million | $274.61 million |
| Operating Income | $28.28 million | $21.81 million |
| Net Income | $9.33 million | $11.61 million |
| Income per Diluted Share | $0.09 | $0.11 |
| Adjusted Net Income | $12.19 million | $25.43 million |
| Adjusted Income per Diluted Share | $0.12 | $0.25 |
Balance Sheet and Cash Flow
As of June 30, 2024, Diamond Offshore Drilling Inc reported total assets of $1.68 billion, slightly down from $1.71 billion at the end of 2023. The company's cash and cash equivalents increased to $165.54 million from $124.46 million. Net cash provided by operating activities for the first half of 2024 was $89.93 million, while net cash used in investing activities was $43.62 million.
Operational Highlights
Operationally, the company's rigs continued to perform well, achieving a revenue efficiency of approximately 95% across the fleet for the third successive quarter, excluding the Ocean GreatWhite incident. The Ocean BlackHawk and Ocean BlackRhino together earned a total of $20.5 million in bonuses over the course of the Senegal campaign.
Analysis and Conclusion
While Diamond Offshore Drilling Inc faced challenges in Q2 2024, including a decrease in revenue and net income, the company managed to achieve significant operational milestones and maintain a strong adjusted EBITDA. The recognition of well-performance bonuses and the completion of repairs to the Ocean GreatWhite are positive indicators for the company's future performance. However, the decline in revenue and net income highlights the need for continued focus on operational efficiency and cost management.
Explore the complete 8-K earnings release (here) from Diamond Offshore Drilling Inc for further details.
