DOF Group (DOFG) Q2 2024 earnings summary

Executive summary

• Announced acquisition of Maersk Supply Service A/S, adding 22 vessels and expanding the global fleet, with closing expected in Q4 2024; transaction to be settled with $577M cash and 25% equity for MSSH.

• Achieved strong Q2 2024 operational and financial performance, with robust results in APAC and Atlantic regions, while Brazil was impacted by planned maintenance and vessel mobilizations.

• Record high order intake of $1.05B in Q2 and $400M post-quarter, driving firm backlog to $2.6B, providing high earnings visibility for the next 24 months.

• Fleet utilization averaged 89% in Q2 2024, with strong performance in APAC and Atlantic, but lower in Brazil due to maintenance and mobilization.

• The combined group will have the largest fleet among core players, well-positioned for both oil & gas and offshore wind markets.

Financial highlights

• Q2 2024 revenue reached $361M, up from $330M in Q2 2023; EBITDA was $122M, slightly above last year; EBIT was $93M, down from $113M.

• Net profit for Q2 2024 was $6M, down from $103M in Q2 2023, mainly due to a $62M unrealized currency loss from Brazilian operations.

• Cash flow from operations was $119M, up from $75M year-over-year; cash and cash equivalents at $277M at quarter-end.

• Net interest-bearing debt reduced to $969M, with NIBD/EBITDA at 2.7x; equity ratio improved to 39% from 30% year-over-year.

• Q2 2024 EPS was $0.04, compared to $0.65 in Q2 2023.

Outlook and guidance

• 2024 EBITDA guidance raised to $500–520M; revenue guidance narrowed to $1.4–1.5B; CapEx increased to $100–110M due to new contract requirements.

• Depreciation guidance at $170–180M; tax payable lowered to $40–50M.

• Strong backlog covers 95% of H2 2024 revenue and 70–75% of 2025 revenue guidance.

• Expect improved earnings in H2 2024 due to vessels returning to service, new contracts, and higher project activity.

• MSS acquisition to close in Q4 2024, creating a leading offshore service provider with 78 vessels and over 5,400 employees.