NorAm lives up to expectations by being a “pay-as-you-go” company, according to the quarterly report Monday evening.
From the quarterly numbers, it appears that revenue increased 11 percent from the previous quarter and ended at $23.7 million. Operating profit before depreciation and amortization increased 25% sequentially to $15 million.
|(million US dollars)||First quarter 2023||First quarter 2022|
|The result is before taxes||10||-4.7|
|The result after tax||9.5||−4.3|
Noram for drilling
In the first quarter, the utilization rate was 99.3 percent, which is the same utilization rate as in the previous quarter
Big profits for shareholders
When NorAm went public at the end of 2022, Chairman Ole B. Hjertaker told Finansavisen that the rig’s strategy would be to pay direct returns to shareholders.
– At current rates, we’re talking about $50 million a year in dividend capacity, Hegeraker told Finansavisen last fall.
The company was now debt-free and seized the opportunity to pay out large dividends to shareholders.
In the first quarter, most of our $14 million in operating cash flow went to paying dividends. A total of $13.1 million in dividends was paid out during the first quarter.
This corresponds to NOK 3.15 per month for NorAM Drilling contributors.
– When you pay out most of your cash flow in dividends, do you have anything left to invest?
– We have already completed investments in our rigs, all of which have been modernized relatively recently to be among the strongest and best on the market, so that the profit we make can go directly to the shareholders. We don’t necessarily have a desire to invest in more rigs. First and foremost, we want to increase earnings and dividend per share, says Marius Foruli of Noram to Finansavisen
We believe in a strong market and great profits
NorAm Drilling is positive about the outlook and comments that they believe in the continuation of a strong drilling market in the future, despite potential pressure on today’s rates in the short term.
– What are the odds of proceeding with the dividend if daily rates go down?
– All profits above our break-even point of about $17,000 per rig per day can go directly to our dividend shareholders because we are debt free. Rates were about $31,000 per day in the first quarter and still well above that level, Furuly says.
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