Paratus Energy Svcs Ltd

Welcome to the Paratus Energy Q2 2025 earnings call. There will be a question and answer session after the presentation, and you can submit your questions by using the button on the bottom of the player. I will now hand over the call to your host.

Good day, everyone.

Welcome to the second quarter 2025 results presentation for Peritus Energy Services Limited. My name is Robert Jensen and I am the CEO of Peritus. Joining me on the call today is Baton Hajime Mehdi, our CFO. Before we begin today's presentation I would like to remind all participants that some of the statements on this call may involve forward-looking statements. Forward-looking information involves risks and uncertainties by nature that may cause actual results to differ materially from those projected in such statements. I therefore refer you to our latest public filings. The second quarter of 2025 was a solid one for Paritus, supported by high technical utilization across the fleet, solid cost control, and steady joint venture cash flows. Our operating entities recorded a technical utilization of 98% for the quarter. Revenues were 107 million compared with 103 million in the first quarter, as new contracts at sea gems at higher day rates more than offset the lower contribution from Fontys due to Titania being idle. Adjusted EBITDA was 57 million versus 58 million in Q1, reflecting one-time cost at Fontys related to the demobilization of Titania. Net income for the quarter was 5.6 million, up from 3.2 million in Q1. In line with our policy of targeting stable cash distribution to shareholders, the board of directors has declared a dividend of 22 cents per share for Q2. This is consistent with every quarterly distribution since our IPO last year. During the second quarter, we completed approximately 5 million in share buybacks. The company now owns around 6.8 million of its own shares, representing approximately 4% of total share capital. As a reminder, we have approximately 75 million remaining capacity under the 100 million share repurchase authorization. With today's announced dividend, we will have returned over 200 million to our shareholders since we started our distribution a year ago, equivalent to roughly 30% of the company's current market capitalization. This underscores our commitment to a shareholder-friendly capital return policy. We ended Q2 with a cash balance of 93 million and net debt of 631 million. The quarter-on-quarter increase in net debt primarily reflects working capital buildup in Mexico. Receivables in Mexico increased to 232 million from 185 million in the prior quarter, as no payments were received during Q2. However, after quarter end, Thumptis received its first payment from the client since our monetization agreement in Q1. Importantly, in August, the Mexican government also announced a comprehensive support plan for our client, including approximately 25 billion in guaranteed funding, earmarked in part for supplier debt settlements. We view this as an important step to stabilize the client's financial position, improve payment practices, and support its production target of 1.8 million barrels per day. Now let's move over to the quarterly review for each of our two operating segments. We continue with our joint venture, SeaGems. Please note that all numbers referred to on this slide are on 100% basis, of which we own 50%. SeaGems had another strong quarter with revenues of 125 million compared to 112 million in the first quarter. The sequential increase was primarily driven by higher average day rates from the new contracts on four vessels, partly offset by some off-hire days related to acceptance testing on these vessels. EBITDA for the quarter was 81 million, up from 65 million in the first quarter, benefiting from stronger revenues, reimbursement of an insurance claim for Esmeralda, and certain favorable changes in accounting provisions. Operating expenses came in at 31 million, down from 36 million in Q1, while G&A was steady at 7 million compared to 6 million in the previous quarter. Technical utilization for the quarter was a solid 97.8% versus 98.4% in Q1. average contractual day rate increased significantly to 255 000 per day from 212 000 in the first quarter again reflecting the start of new contracts across four vessels the onyx completed its acceptance testing with petrobras earlier this month marking the final vessel to transition over to the new petrobras contracts consequently the average day rate for sea gems will continue to trend higher in the second half of the year The contractual backlog for C-GEMS stood at 1.6 billion at the end of the quarter. During the first half of 2025, C-GEMS distributed 66 million in cash to its shareholders, of which Paritus received 33 million. Consistent with what we flagged on the Q1 call, distributions are expected to be sequentially higher in the second half of the year, given the JV's cash flow profile and the timing of capital expenditures. Following quarter end, Paratus have received a total of 45 million in distributions for July and August. Finally, subsequent to the second quarter, Seagem secured 60 million in additional capex financing from local Brazilian banks. Amortization is scheduled to start in 2026 and will run over three years. Moving over to Fontys Energy. Our drilling business reported Q2 revenues of 44 million and an adjusted EBITDA of 18 million, compared to 47 million and 27 million in the first quarter. The decline was mainly driven by the Titania remaining idle during the quarter and costs related to her demobilization. Operating expenses were 26 million compared to 18 million in Q1. Again, mostly reflective of tugboat and fuel expenses associated with the Titania's move. It's also worth noting that Q1 OPEX was positively impacted by one-offs and lower than normal. GNA for the quarter was 400,000 down from 1 million in the previous quarter. Technical utilization remained strong at 99.2% compared with 99.7% in Q1. The average day rate declined to 116,000 per day from 125,000 per day in the previous quarter. as all rigs operated a full quarter at the contractual floor rates. Fontes' backlog at the end of the second quarter stood at 98 million, down from 139 million at the end of Q1. The receivable balance, as mentioned earlier, increased to 232 million at quarter end from 185 million in Q1, as no payments were received during the quarter. However, also mentioned before, subsequent to Q2, Fontys received a modest payment from its client, the first since a receivable monetization transaction in Q1. As always, we remain actively engaged with the client to expedite the collection of outstanding receivables and expect to recover the full amount, as has been the case in the past. As mentioned earlier, we are encouraged by the recent support plan by the Mexican government, and while it probably will take some time to implement, it will hopefully provide support to both payments and future demands. Looking at the fleet, with the exception of Titania, all the rigs are currently working and contracted into 2026. The Titania has been successfully reimported to Mexico and is kept readily available for new opportunities. We expect active contract discussions to take place in the second half of this year, supported by rising activity in Mexico. In our view, if the client is to achieve its stated production target of 1.8 million barrels per day, all units in the country will likely be needed. Against that backdrop, we remain confident in the demand outlook for all of our assets and will continue to evaluate opportunities for Titania both within and outside of Mexico. While pursuing new contracts remains a core focus for Fontys, we're also evaluating strategic opportunities for our Jacob assets with a focus on creating long-term value to our shareholders. And with that, I will leave the word over to Baton to walk you through the financial details.