Paratus Boosts 2024 Earnings Outlook, Clarifies Mexican Operations
Tuesday, Nov 26, 2024 2:51 am ET
1min read Paratus Energy Services Ltd. (Oslo: PLSV) has announced an upward revision of its full-year 2024 earnings guidance, reflecting strong operational execution throughout the year. The company's subsidiary, Fontis Holdings Ltd., operates rigs in Mexico, and Paratus has provided an update on these operations, clarifying potential financial impacts. This article examines Paratus' earnings guidance revision and the dynamics of its Mexican operations.
Paratus' strong operational performance has led to a significant increase in its full-year 2024 earnings guidance. The company has raised its EBITDA guidance to $250-260 million, representing a mid-point increase of $25 million from the previous guidance range of $220-240 million. This substantial revision reflects Paratus' exceptional performance and demonstrates the company's ability to deliver on its financial targets.
Paratus has noted recent reports regarding a potential temporary reduction in rig activity in Mexico, and the Company wishes to provide an update on the potential financial impact of such dynamics. The contracts for all of Fontis' jack-ups with the client permit activity to be temporarily ceased for up to 45 days during the contract term, without revenue being generated during such period. However, any deferred days will extend the contract duration accordingly. Fontis has received notification from its client that the Courageous will temporarily cease operations for 45 days due to delays in the client's preparatory activities at its next location. Operations at the Courageous' current location is expected to be completed in early December 2024, upon which the rig will remain in standby at its location.
The estimated EBITDA impact of a 45-day deferral through the end of the firm contract period is expected to be approximately $3 million. Paratus has accommodated and priced such flexibility into its contracts in Mexico to allow its client to execute its operations more efficiently. The Company remains highly focused on supporting its client and continuing to strengthen the long-standing relationship it has had for over a decade, and the Company has taken note of the public comments the client has recently provided about its future plans for operations and payments to its suppliers.
In conclusion, Paratus' upward revision of its 2024 earnings guidance demonstrates the company's strong operational execution and commitment to supporting its clients. Despite potential temporary reductions in rig activity in Mexico, Paratus has accommodated flexibility in its contracts to ensure efficient client operations. The Company's focus on strengthening its long-standing relationship with its client positions it well for future growth and success.
Paratus' strong operational performance has led to a significant increase in its full-year 2024 earnings guidance. The company has raised its EBITDA guidance to $250-260 million, representing a mid-point increase of $25 million from the previous guidance range of $220-240 million. This substantial revision reflects Paratus' exceptional performance and demonstrates the company's ability to deliver on its financial targets.
Paratus has noted recent reports regarding a potential temporary reduction in rig activity in Mexico, and the Company wishes to provide an update on the potential financial impact of such dynamics. The contracts for all of Fontis' jack-ups with the client permit activity to be temporarily ceased for up to 45 days during the contract term, without revenue being generated during such period. However, any deferred days will extend the contract duration accordingly. Fontis has received notification from its client that the Courageous will temporarily cease operations for 45 days due to delays in the client's preparatory activities at its next location. Operations at the Courageous' current location is expected to be completed in early December 2024, upon which the rig will remain in standby at its location.
The estimated EBITDA impact of a 45-day deferral through the end of the firm contract period is expected to be approximately $3 million. Paratus has accommodated and priced such flexibility into its contracts in Mexico to allow its client to execute its operations more efficiently. The Company remains highly focused on supporting its client and continuing to strengthen the long-standing relationship it has had for over a decade, and the Company has taken note of the public comments the client has recently provided about its future plans for operations and payments to its suppliers.
In conclusion, Paratus' upward revision of its 2024 earnings guidance demonstrates the company's strong operational execution and commitment to supporting its clients. Despite potential temporary reductions in rig activity in Mexico, Paratus has accommodated flexibility in its contracts to ensure efficient client operations. The Company's focus on strengthening its long-standing relationship with its client positions it well for future growth and success.
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