Paratus Energy Services Ltd. (ticker “PLSV”) (“Paratus” or the “Company”) reported operational and financial results for the second quarter of 2024, including management reporting highlighted by $124 million in revenues and $70 million in adjusted EBITDA. Net profit increased to $34 million, up from $10 million from the previous quarter, driven by strong operational performance. At quarter-end, the Group held $246 million in cash deposits and reduced its net debt to $518 million.
Paratus intends to return a majority of its excess free cash flows to shareholders, through stable, long-term and sustainable distributions or share repurchases, subject to allowance under existing debt indentures, applicable securities legislation and Board review. On the back of solid results, a robust balance sheet and outlook, the Board of Directors has on 9 September 2024 authorized a cash distribution to shareholders of $0.22 per share. Additionally, the Board of Directors has approved a share repurchase mandate to acquire shares for an amount of up to $100 million which will provide the Company with flexibility to repurchase shares in the open market. Any share repurchase programs will be announced separately and may be suspended or discontinued at any time.
“Our solid operational performance, and corresponding strong cash flow enables us to take this important step in announcing our first cash distribution” said Robert Jensen, CEO of Paratus. “This step underscores our confidence in the company’s financial strengths and reinforces our commitment to returning capital to our shareholders.”
In the second quarter 2024, the Company strengthened its capital structure through raising a new five-year bond to partially refinance the 2026 notes and raising $75 million of gross proceeds in connection with a successful listing on the Euronext Growth Oslo. Both issuances attracted strong investor demand and were significantly oversubscribed.
Key highlights post-quarter developments
• Successfully listed on the Euronext Growth Oslo
• Successful placement of 15.3 million new shares, raising gross proceeds of $75 million
• Successful placement of a new $500 million five-year bonds, partially refinancing 2026 notes post-Q2 2024 and extending majority of maturities to 2029
• Delivered Group revenues of $124 million and adjusted EBITDA of $70 million on strong operational performance
• Exited the quarter with a Group cash balance of $246 million and $518 million in net debt
• Increased Seagems backlog with an additional ~$1.8bn from three-year contracts for each of the JV’s six vessels and further secured extensions for the Rubi and Esmeralda post-Q2, increasing the backlog by another ~$74 million combined
• The Board of Directors authorized a cash distribution to shareholder of $0.22 per share and approved a share repurchase mandate to acquire shares for an amount of up to $100 million.
Fontis
The Company’s wholly owned subsidiary, Fontis, generated revenues of $72 million, marking a 30% increase from the previous quarter driven mainly by the recognition of $15 million of revenue from previously unbilled services, and higher dayrates following market indexation in February 2024. Fontis achieved an average contractual rate of $126.7 thousand per day, from $118.1 thousand per day in the previous quarter and an average technical utilization of 99.8% (Q1 2024: 99.6%) and closed the quarter with a contract backlog of $369 million.
During the quarter, Fontis collected $90 million of receivables from its key client in Mexico ($16 million in Q1 2024). The Company notes that the collection from the client may continue to fluctuate going forward.
Seagems JV
The Company’s 50% stake in the Seagems JV contributed $52 million in revenues and $28 million in adjusted EBITDA, remaining steady compared to the previous quarter. The JV achieved an average contractual rate of $200.8 thousand per day and improved its technical utilization to 99.3%, up from 98.7% in Q1 2024.
During first half of 2024, Seagems distributed $34 million to Paratus, pursuant to agreed plan amongst the JV shareholders.
Furthermore, in the second quarter the Company announced new contracts for its entire fleet of six multipurpose pipe-laying support vessels through a competitive Petrobras tender process, adding approximately $1.8 billion to the backlog.
Following end of Q2 2024, Seagems secured extensions for the vessels Rubi and Esmeralda, increasing the JV’s backlog by approximately $74 million. The Rubi will continue operations for Petrobras for an additional 235 days, adding $62 million to the backlog, while the Esmeralda’s new commitment comprise a 60-day extension with Petrobras, adding $12 million in backlog. Both vessels will commence and complete these new commitments prior to starting the new three-year contracts awarded by Petrobras earlier this year.
Note: Numbers above are based on management reporting
Webcast and Q&A Session Paratus will host a presentation of the Q2 2024 results via an audio webcast today at 15:00 CET. The presentation will be hosted by Robert Jensen, CEO and Baton Haxhimehmedi, CFO.
To join the webcast, please use the following link: https://channel.royalcast.com/landingpage/paratus-energy/20240910_1/
A Q&A session will follow the presentation, with instructions on how to submit questions provided at the start of the session.
