Nabors Industries (NBR) Q3 2024 earnings summary

Executive summary

• Q3 2024 operating revenues were $732 million, nearly flat year-over-year and sequentially, with adjusted EBITDA rising to $222 million and a net loss of $55.8 million.

• Announced acquisition of Parker Wellbore (Parker Drilling), expected to add $180 million EBITDA, $35 million in annual synergies, and expand global drilling and tubular services.

• International rig deployments and technology-driven solutions drove growth, with record operational achievements in automation and drilling efficiency.

• Focused on international expansion, technology innovation, and sustainability initiatives, including decarbonization and geothermal technology.

• Net loss widened from Q2 2024, impacted by higher interest payments and one-time charges.

Financial highlights

• Q3 2024 adjusted EBITDA was $222 million, up from $218 million in Q2; adjusted operating income was $105.9 million, up $16.1 million year-over-year.

• Operating revenues were $732 million, with net loss of $56 million; adjusted free cash flow was $18 million, down from $57 million in Q2.

• Capital expenditures for Q3 were $118 million, with full-year 2024 capex forecast at $600 million, including $230 million for SANAD new builds.

• Cash and short-term investments were $459.3 million as of September 30, 2024, down from $1.1 billion at year-end 2023.

• Net debt as of September 30, 2024 was $2.04 billion.

Outlook and guidance

• Q4 2024 expected to be the strongest quarter for cash generation, with plans to retire debt using free cash flow.

• Lower 48 daily rig margins projected at $15,000 for Q4; international daily margins at $17,000; rig counts stable.

• Full-year 2024 free cash flow expected between $100 million and $130 million.

• Continued international rig deployments anticipated through 2025, especially in Saudi Arabia and Argentina.

• Management expects sufficient liquidity and covenant compliance post-Parker merger.