Transocean LTD (NYSE: RIG) recently announced its financial results for the second quarter of 2021. In the report, the company announced a net loss attributable to controlling interest of $103 million or $0.17 per diluted share for the six and three months that ended on June 30, 2021.
Financial summary
The company reported a net favorable item of $0.1 per diluted share ($6 million), related to discrete tax items. After consideration of this net favorable item, the adjusted net loss for 2Q2021 was $0.18 per diluted share ($109 million), a decrease from the $0.19 per diluted share ($117 million) in the first quarter of 2021.
Contract drilling revenues for the second quarter of 2021 increased sequentially by $3 million to $656 million, mainly due to three rigs that returned to work after a shipyard stay. The company also reported $57 million in non-cash revenue reduction in the second quarter of 2021, resulting from contract intangible amortization linked to the Songa and Ocean Rig acquisitions. This is a slight increase from the $56 million in the first quarter of 2021.
The company’s Effective Tax Rate in the second quarter of 2021 was 4.6%, a 13.8% decrease from the first quarter. The huge decline can be attributed to higher earnings in jurisdictions with lower tax rates, releases of unclear tax positions concerning settlements, and other discrete items. As a result, the Effective Tax Rate excluding discrete items was 10.2 %, compared to 5.7% in the first quarter of 2021.
Transocean’s cash flow provided by operating activities was $153 million, up from $96 million in the previous quarter. This was mainly due to reduced personnel-related payments and interest payments.
Capital expenditures in 2Q2021 were $41 million and were mainly related to the company’s new build drillships under construction. This is an increase from the $59 million in 1Q2021.
The CEO’s perspective
According to Transocean CEO Jeremy Thigpen, the company delivered an Adjusted EBITDA Margin of 36% on $713 million of Adjusted Revenue. He added that these exceptional results were largely driven by the company’s continued focus on operational excellence.
