Shelf Drilling (North Sea) (SDNS) Q2 2025 earnings summary

Executive summary

• Achieved significant improvement in safety performance, with a year-to-date total recordable incident rate of 0.16 as of June 30.

• Adjusted EBITDA held stable at $94M in Q2 2025, with a margin of 39%, and net income was $11M.

• Secured seven new contracts/extensions since Q1 2025, supporting backlog growth and revenue visibility.

• Achieved net income of $16.1M for the six months ended June 30, 2025, reversing a net loss of $54.1M year-over-year.

• Company became a wholly-owned subsidiary of SDL in October 2024.

Financial highlights

• Adjusted revenue for Q2 2025 was $240M, down 1% sequentially due to contract completions.

• Net debt declined by $62M from year-end 2024.

• Consolidated cash balance as of June 30 was $172M, down from $207M at the end of March 2025, mainly due to $115M in debt service payments.

• Capital expenditures and deferred costs increased to $18M in Q2 2025 from $16M in Q1 2025.

• Cash and cash equivalents increased to $33.2M as of June 30, 2025, from $21.4M at year-end 2024.

Outlook and guidance

• Full-year 2025 adjusted EBITDA guidance raised to $320–$360M, up from $310–$360M.

• Revenues and effective utilization expected to improve in Q4 2025 as new contracts commence.

• Total capital spending guidance for 2025 remains at $85–$115M.

• The longest drilling contract extends through December 2026, providing revenue visibility.

• Future amortization of contract liabilities and intangible liabilities is scheduled through 2026.