OB:ODL

Stock Analysis Report

Odfjell Drilling

Executive Summary

Odfjell Drilling Ltd. operates as an integrated offshore drilling, well service, and engineering company worldwide.

Rewards

Trading at 66.7% below its fair value

Earnings are forecast to grow 38.31% per year

Earnings grew by 104.5% over the past year

Risk Analysis

Interest payments are not well covered by earnings

Highly volatile share price over past 3 months

Large one-off items impacting financial results

Shareholders have been diluted in the past year



Snowflake Analysis

Proven track record and fair value.

Share Price & News

How has Odfjell Drilling's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ODL's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-7.6%

ODL

-3.8%

NO Energy Services

-0.8%

NO Market


1 Year Return

0.2%

ODL

-13.1%

NO Energy Services

4.9%

NO Market

Return vs Industry: ODL exceeded the Norwegian Energy Services industry which returned -10.6% over the past year.

Return vs Market: ODL underperformed the Norwegian Market which returned 4.9% over the past year.


Shareholder returns

ODLIndustryMarket
7 Day-7.6%-3.8%-0.8%
30 Day-23.9%-4.7%1.1%
90 Day-12.9%-0.2%3.6%
1 Year0.2%0.2%-11.3%-13.1%10.5%4.9%
3 Year51.8%51.8%-15.7%-21.0%31.4%15.1%
5 Year178.8%178.8%-23.0%-47.5%64.3%26.9%

Price Volatility Vs. Market

How volatile is Odfjell Drilling's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Odfjell Drilling undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ODL (NOK27.7) is trading below our estimate of fair value (NOK83.07)

Significantly Below Fair Value: ODL is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: ODL is poor value based on its PE Ratio (17.9x) compared to the Energy Services industry average (16.4x).

PE vs Market: ODL is poor value based on its PE Ratio (17.9x) compared to the Norwegian market (14.2x).


Price to Earnings Growth Ratio

PEG Ratio: ODL is good value based on its PEG Ratio (0.5x)


Price to Book Ratio

PB vs Industry: ODL is overvalued based on its PB Ratio (0.7x) compared to the NO Energy Services industry average (0.7x).


Next Steps

Future Growth

How is Odfjell Drilling forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

39.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ODL's forecast earnings growth (38.3% per year) is above the savings rate (0.7%).

Earnings vs Market: ODL's earnings (38.3% per year) are forecast to grow faster than the Norwegian market (20.2% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: ODL's revenue (3.3% per year) is forecast to grow slower than the Norwegian market (3.5% per year).

High Growth Revenue: ODL's revenue (3.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ODL's Return on Equity is forecast to be low in 3 years time (9.8%).


Next Steps

Past Performance

How has Odfjell Drilling performed over the past 5 years?

36.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ODL has a large one-off gain of $9.7M impacting its September 30 2019 financial results.

Growing Profit Margin: ODL's current net profit margins (5.4%) are higher than last year (2.9%).


Past Earnings Growth Analysis

Earnings Trend: ODL has become profitable over the past 5 years, growing earnings by 36.8% per year.

Accelerating Growth: ODL's earnings growth over the past year (104.5%) exceeds its 5-year average (36.8% per year).

Earnings vs Industry: ODL earnings growth over the past year (104.5%) exceeded the Energy Services industry 38.8%.


Return on Equity

High ROE: ODL's Return on Equity (4.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Odfjell Drilling's financial position?


Financial Position Analysis

Short Term Liabilities: ODL's short term assets ($322.1M) do not cover its short term liabilities ($351.0M).

Long Term Liabilities: ODL's short term assets ($322.1M) do not cover its long term liabilities ($1.3B).


Debt to Equity History and Analysis

Debt Level: ODL's debt to equity ratio (135.6%) is considered high.

Reducing Debt: ODL's debt to equity ratio has increased from 103% to 135.6% over the past 5 years.

Debt Coverage: ODL's debt is not well covered by operating cash flow (15.6%).

Interest Coverage: ODL's interest payments on its debt are not well covered by EBIT (1.7x coverage).


Balance Sheet

Inventory Level: ODL has a high level of physical assets or inventory.

Debt Coverage by Assets: ODL's debt is not covered by short term assets (assets are 0.2x debt).


Next Steps

Dividend

What is Odfjell Drilling's current dividend yield, its reliability and sustainability?

0.50%

Forecast Dividend Yield


Dividend Yield vs Market

company0%marketbottom25%2.4%markettop25%5.5%industryaverage4.4%forecastin3Years0.5%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate ODL's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate ODL's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if ODL's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if ODL's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: ODL is not paying a notable dividend for the Norwegian market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of ODL's dividend in 3 years as they are not forecast to pay a notable one for the Norwegian market.


Next Steps

Management

What is the CEO of Odfjell Drilling's salary, the management and board of directors tenure and is there insider trading?

3.6yrs

Average management tenure


CEO

Simen Lieungh (59yo)

10yrs

Tenure

US$1,005,000

Compensation

Mr. Simen Lieungh is Director at Multiconsult ASA since April 25, 2019. He has been the Chief Executive Officer and President of Odfjell Drilling AS since October 1, 2010 and Odfjell Drilling Ltd. since 20 ...


CEO Compensation Analysis

Compensation vs Market: Simen's total compensation ($USD1.01M) is above average for companies of similar size in the Norwegian market ($USD550.96K).

Compensation vs Earnings: Simen's compensation has increased by more than 20% in the past year.


Management Age and Tenure

3.6yrs

Average Tenure

58.5yo

Average Age

Experienced Management: ODL's management team is considered experienced (3.6 years average tenure).


Board Age and Tenure

1.1yrs

Average Tenure

Experienced Board: ODL's board of directors are not considered experienced ( 1.1 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: ODL insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Sellkr12,857,15628 Nov 19
Simen Lieungh
EntityIndividual
Role
Chief Executive Officer
CEO & President
Shares476,191
Max Pricekr27.00
Buykr12,857,15628 Nov 19
Odfjell Partners Ltd
EntityCompany
Shares476,191
Max Pricekr27.00

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 11.1%.


Management Team

  • Simen Lieungh (59yo)

    CEO & President

    • Tenure: 10yrs
    • Compensation: US$1.01m
  • Atle Sæbø (63yo)

    CFO & Executive VP

    • Compensation: US$540.00k
  • Bengt Olsen (63yo)

    Senior Vice President of Communication & Information

    • Janike Myre (57yo)

      Senior Vice President of QHSE

      • Jone Torstensen (58yo)

        Chief of Staff & Executive VP

        • Kurt Fjell

          Executive Vice President of Odfjell Drilling Technology

          • Per Lund

            Chief Technology Officer - Digital Transformation

            • Michael Nielsen

              Executive VP & Chief Commercial Officer

              • Tenure: 3.6yrs
            • Kjetil Gjersdal (49yo)

              Executive Vice President of Mobile Drilling Units

              • Tenure: 3.6yrs
            • Eirik Knudsen

              VP of Corporate Finance & Investor Relations


              Board Members

              • Alasdair Shiach

                Independent Director

                • Tenure: 1.1yrs
              • Helene Odfjell (54yo)

                Chairman of the Board

                • Susanne Munch Thore (59yo)

                  Independent Director

                  • Tenure: 1.6yrs
                • Thomas Marsoner

                  Independent Director

                  • Tenure: 1.1yrs

                Company Information

                Odfjell Drilling Ltd.'s company bio, employee growth, exchange listings and data sources


                Key Information

                • Name: Odfjell Drilling Ltd.
                • Ticker: ODL
                • Exchange: OB
                • Founded: 1914
                • Industry: Oil and Gas Drilling
                • Sector: Energy
                • Market Cap: kr5.929b
                • Shares outstanding: 236.78m
                • Website: https://www.odfjelldrilling.com

                Number of Employees


                Location

                • Odfjell Drilling Ltd.
                • Bergen House
                • Crawpeel Road
                • Aberdeen
                • Aberdeenshire
                • AB12 3LG
                • United Kingdom

                Listings

                TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
                ODLOB (Oslo Bors)YesShare Capital NONOKSep 2013
                OD3DB (Deutsche Boerse AG)YesShare Capital DEEURSep 2013
                0QHXLSE (London Stock Exchange)YesShare Capital GBNOKSep 2013
                ODLOBATS-CHIXE (BATS 'Chi-X Europe')YesShare Capital GBNOKSep 2013

                Biography

                Odfjell Drilling Ltd. operates as an integrated offshore drilling, well service, and engineering company worldwide. The company operates through three segments: Mobile Offshore Drilling Units, Drilling & Technology, and Well Services. It operates drilling units and offers management services to owners of semisubmersibles, drillships, and jack-up; and project management and follow-up during construction, management of regulatory requirements, marketing and client relations, preparations for operation, and drilling operations. The company also provides integrated drilling services, such as onshore support, production drilling and completion, well maintenance, plugging and abandonment, facility maintenance planning, and project management for maintenance and modifications; and onceptual engineering and engineering design, compliance assurance and maintenance management, marine and operational support, and rig inspection services, as well as construction and commissioning support, modifications, and upgrades. In addition, it provides well services to the oil industry, including casing and tubular running, drill tool and tubular rental, well intervention, and wellbore cleaning services. The company was founded in 1914 and is headquartered in Aberdeen, the United Kingdom. Odfjell Drilling Ltd. is a subsidiary of Odfjell Partners Ltd. 


                Company Analysis and Financial Data Status

                All financial data provided by Standard & Poor's Capital IQ.
                DataLast Updated (UTC time)
                Company Analysis2020/01/26 22:11
                End of Day Share Price2020/01/24 00:00
                Earnings2019/09/30
                Annual Earnings2018/12/31


                Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.