Borr Drilling Ltd. Form 6-K Summary
Business Context and Reporting Period
This Form 6-K reports the Unaudited Interim Financial Results for Borr Drilling Limited for the six months ended June 30, 2025. Borr Drilling is an offshore shallow-water drilling contractor operating a fleet of 24 premium jack-up rigs. The company is listed on the NYSE and previously delisted from the Oslo Stock Exchange in December 2024.
Key Financial Metrics
| Metric (in millions USD) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 |
|---|---|---|
| Total Operating Revenues | $484.3 | $505.9 |
| Operating Income | $156.7 | $189.5 |
| Net Income | $18.2 | $46.1 |
| Adjusted EBITDA | $229.3 | $253.2 |
| Net Cash from Operating Activities | $145.0 | $39.9 |
| Cash and Cash Equivalents (End of Period) | $92.4 | $102.6 |
| Total Debt Outstanding (Principal) | $2,112.3 | N/A |
Note: The filing does not explicitly state a net profit margin percentage; however, Net Income was $18.2 million on $484.3 million revenue.
Material Changes vs. Prior Period
- Revenue Decline: Total operating revenues decreased by $21.6 million (4%) primarily due to a $35.0 million drop in related party revenue following the termination of bareboat charter agreements with Perfomex in 2024. This was partially offset by a $19.4 million increase in dayrate revenue driven by higher average dayrates.
- Profitability Pressure: Net income fell 61% to $18.2 million. This was driven by lower revenues, increased rig operating expenses ($3.9 million increase), higher depreciation ($8.9 million increase), and a shift from a gain to a loss in equity method investments ($4.9 million swing).
- Strong Operating Cash Flow: Despite lower net income, net cash provided by operating activities surged 263% to $145.0 million, largely due to $119.9 million in cash settlements from Mexico operations and improved working capital movements.
- Debt Repayment: The company utilized financing activities to repay $70.7 million in debt, including significant payments on Senior Secured Notes due in 2028 and 2030.
Outlook, Management Commentary, and Risks
- Capital Raise: In a subsequent event (July-August 2025), the company completed a public offering of 50,000,000 shares at $2.05 per share, raising gross proceeds of $102.5 million to bolster liquidity.
- Operational Updates: The rig "Vali" commenced its first contract in March 2025. Three rigs previously suspended in Mexico ("Galar", "Grid", "Gersemi") recommenced operations in May 2025, while "Odin" received a temporary suspension notice in June 2025 but has an LOI for a combined accommodation and drilling program.
- Management Transition: Chief Commercial Officer Bruno Morand was appointed to succeed CEO Patrick Schorn, effective September 1, 2025. Mr. Schorn will become Executive Chair.
- Risks: Key risks include liquidity constraints, compliance with debt covenants (specifically the super senior revolving credit facility), potential suspension of operations, and exposure to geopolitical instability in the Middle East and Ukraine. The company also faces potential tax implications from the new Bermuda Corporate Income Tax Act effective 2025.
Investor Verification Checklist
- Liquidity Position: Verify the utilization of the $102.5 million raised in the July/August 2025 equity offering against the $134.7 million of debt maturing within the next 12 months.
- Mexico Operations: Monitor the status of the "Odin" rig suspension and the execution of the new accommodation/drilling program LOI, as well as the stability of cash settlements from Mexican customers.
- Debt Covenants: Confirm continued compliance with the super senior revolving credit facility and senior secured notes, particularly given the high interest expense ($115.3 million for the six months).
- Contract Mix: Assess the long-term impact of the shift from related party revenue (Perfomex) to third-party bareboat charters and dayrate contracts on revenue stability.
- Tax Exposure: Review the impact of the new 15% Bermuda Corporate Income Tax and global minimum tax (Pillar Two) on future effective tax rates, as the company expects to be in scope in 2026.