Borr Drilling Limited (OB:BDRILL): Is Breakeven Near?

Borr Drilling Limited’s (OB:BDRILL): Borr Drilling Limited operates as a drilling contractor to the oil and gas industry worldwide. The ØRE17.24B market-cap company announced a latest loss of -US$88.00M on 31 December 2017 for its most recent financial year result. As path to profitability is the topic on BDRILL’s investors mind, I’ve decided to gauge market sentiment. I’ve put together a brief outline of industry analyst expectations for BDRILL, its year of breakeven and its implied growth rate.

Check out our latest analysis for Borr Drilling

BDRILL is bordering on breakeven, according to analysts. They anticipate the company to incur a final loss in 2019, before generating positive profits of US$29.24M in 2020. So, BDRILL is predicted to breakeven approximately 2 years from today. How fast will BDRILL have to grow each year in order to reach the breakeven point by 2020? Working backwards from analyst estimates, it turns out that they expect the company to grow 61.70% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

OB:BDRILL Past Future Earnings Mar 22nd 18
OB:BDRILL Past Future Earnings Mar 22nd 18

Given this is a high-level overview, I won’t go into detail the detail of BDRILL’s upcoming projects, but, take into account that by and large oil and gas companies, depending on the stage of operation and resource produced, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

One thing I’d like to point out is that BDRILL has managed its capital prudently, with debt making up 5.83% of equity. This means that BDRILL has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of BDRILL which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at BDRILL, take a look at BDRILL’s company page on Simply Wall St. I’ve also compiled a list of pertinent factors you should further examine:

  1. Historical Track Record: What has BDRILL’s performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Borr Drilling’s board and the CEO’s back ground.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.