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the fourth quarter and full-year 2023, and financial outlook for 2024.
Some highlights from the trading update:
· Revenue of $305 million and adjusted EBITDA of $33.4 million in Q4 2023, a
year-on-year increase of 15% and 14%, respectively.
· EBITDA grew by 36% in 2023, exceeding upper range of full-year guidance.
· Reduced leverage ratio to 2.9 at year-end 2023.
· Estimates 15-20% EBITDA growth in 2024 as well as further reduction of
leverage ratio to between 2.4 and 2.7 at year-end 2024.
âWe delivered 36% EBITDA growth in 2023 due to increased activity across all
divisions. We believe the market fundamentals for our services will continue to
improve and we therefore forecast EBITDA growth of 15-20%, and a further
material reduction in leverage ratio in 2024â says Dag Skindlo, CEO of Archer.
Q4 2023 RESULTS
Archer delivered revenue of $305 million in the fourth quarter 2023, up 15% from
the same quarter last year ($264m). Adjusted EBITDA increased 14% to a record
high $33.4 million ($29m), while EBITDA was $31 million ($27m). EBIT in the
fourth quarter was $16.9 million ($13m), equivalent to an EBIT-margin of 5.5%
(4.9%).
FULL-YEAR 2023 RESULTS
Archerâs full-year 2023 revenue was of $1,169 million, an increase of 20% from
2022 ($970m). EBITDA was $116.8 million, up 36% year-on-year ($86m). EBIT was
$64.7 million, an increase of 121% from 2022 ($29.3m).
Strong growth and operational cash flow for 2023, as well as the refinancing in
the first half of the year, has reduced Archerâs leverage ratio to 2.9 (5.3) at
year-end. Archerâs order backlog stands at $1.7 billion, providing good
visibility for 2024 and beyond.
âWe exceeded the upper range of our financial guidance for 2023. This
demonstrates that our strategy is paying off and that our key markets support
continued growth,â adds Dag Skindlo.
Archer will present its complete fourth quarter and full-year 2023 financial
results on 29 February 2024.
HSE PERFORMANCE
Archer remains committed to deliver best in class on health, safety, and
environment in its operations.
âI want to thank all our employees for their dedication to deliver according to
these standards. We can as a team of 4,800 employees be proud that we had zero
High Potential Incidents in 2023,â says Skindlo.
MARKET OUTLOOK
Archer consists of three operating division: Well Services, Platform Operations,
and Land Drilling.
Archerâs Well Services division delivered an impressive 57% EBITDA growth in
2023, of which approximately 40% was organic. The division has delivered an
organic CAGR of 26% from 2017 to 2023. The company expects continued strong
EBITDA growth from Well Services in 2024.
Within Platform Operations, Archer sees a high demand for P&A and
decommissioning services. The strongest activity and near-term increase in the
well decom market is in the UK, where operators will spend an estimated $26
billion towards 2040, while global offshore P&A market is expected to grow more
than 100% in the next 10 years. The brownfield and decom market, which Archer is
primarily exposed to, is less impacted by fluctuations in the oil price.
Platform Operation expects slightly lower activity in 2024 as one of the modular
drilling rigs is idle while being upgraded and recertified for operation on
Fulmar.
The Land Drilling division delivered solid operational and financial results in
2023. The newly announced Pan American Energy contracts and increased activity
underpins expected EBITDA growth of 15-20% in 2024. Archer considers the
political signals in Argentina as positive regarding opening up the economy and
investments into oil and gas.
FINANCIAL OUTLOOK FOR 2024
In total, Archer expects an EBITDA growth of 15-20% in 2024.
The company expects to reduce its leverage ratio from 2.9 at the beginning of
the year to between 2.4 and 2.7 at year-end 2024.
Archer expects capital expenditure of 4-5% of revenue during 2024. This is
somewhat above historic level to support growth and the recertification and
upgrade of the Emerald modular drilling rig for operation in 2025.
âThe market outlook for our operating divisions remains positive, and we are
well positioned to capitalize on this growth. Deleveraging Archer will remain a
key focus in order to create additional financial flexibility for Archer in the
coming years,â Dag Skindlo concludes.
CONFERENCE CALL TODAY AT 09:00 CET
Archer will host a conference call at 9:00 am CET on January 26, 2024. To follow
the presentation, the following options are available:
A. Webcast
To register for the webcast please go to
Events Platform - Q4
B. Conference call
To access the call, which is open to the public, please dial in at the
participant telephone numbers listed below. Please call in 10 minutes prior to
the scheduled start time, and ask for the âArcher Q4 2023 Trading Update and
2024 Outlook Presentationâ.
Participants dial-in:
United Kingdom +44 20 3936 2999
United States +1 646 787 9445
Germany +49 32 221098334
Norway: +47 815 03 308
Access code: 352865
The operator will ask for your name and company. Following the presentation
there will be a Q&A session. Information on how to ask questions will be given
at the beginning of the Q&A session.
For additional information please contact:
Dag Skindlo, Chief Executive Officer | Mobile: +47 982 26 624 | Email:
dag.skindlo@archerwell.com
Espen Joranger, Chief Financial Officer | Mobile: +47 982 06 812 | Email:
espen.joranger@archerwell.com
Joachim Houeland, Manager Treasury & Investor Relations | Mobile: +47 482 78 748
| Email: joachim.houeland@archerwell.com
This information is subject of the disclosure requirements acc. to §5-12 vphl
(Norwegian Securities Trading Act)
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