Valaris Ltd Reports 18% Revenue Increase but Net Loss in Q1 2025

Valaris Ltd reported a significant increase in financial performance for the first quarter of 2025, with total operating revenues reaching $620.7 million, up 18% from $525.0 million in the same period last year. The company’s revenues, exclusive of reimbursable revenues, also rose to $577.8 million from $491.2 million, reflecting a 17.6% increase. However, Valaris experienced a net loss of $37.9 million, compared to a net income of $25.5 million in the prior year, primarily due to a substantial deferred tax expense of $168.8 million related to a valuation allowance on deferred tax assets.

In comparison to the previous quarter, Valaris saw a 6% increase in total operating revenues, driven by higher average daily revenues and the commencement of new contracts for several rigs. Contract drilling expenses decreased slightly to $415.0 million from $444.8 million year-over-year, attributed to lower operating costs and a reduction in mobilization expenses. The company also recognized a loss on impairment of $7.8 million related to the retirement of three semisubmersible rigs, which were subsequently sold for recycling.

Strategically, Valaris has been active in divesting non-core assets, including the sale of the VALARIS 75 rig for $24 million, resulting in a pre-tax gain of approximately $23 million. The company also approved the retirement of three semisubmersible rigs, which were reclassified as assets held for sale. As of March 31, 2025, Valaris owned 49 rigs, including 34 jackup rigs and 13 drillships, and maintained a 50% equity interest in ARO, a joint venture with Saudi Aramco that operates additional rigs.

Operationally, Valaris reported a total fleet utilization rate of 64% as of March 31, 2025, with 88% utilization for the active fleet. The average daily revenue for floaters increased to $384,000, while jackups saw an increase to $128,000. The company’s cash and cash equivalents rose to $441.4 million from $368.2 million at the end of the previous quarter, bolstered by cash flow from operations of $155.9 million.

Looking ahead, Valaris anticipates continued challenges in the offshore drilling market due to fluctuating oil prices and potential economic slowdowns. The company remains focused on maintaining operational efficiency and exploring opportunities for growth, including potential acquisitions and capital expenditures estimated between $375 million and $415 million for 2025. Valaris is also committed to its share repurchase program, with approximately $275 million available for repurchases as of March 31, 2025.