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NOV reports 4Q19 and FY19 results

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Oilfield Technology,

National Oilwell Varco, Inc. (NOV) has reported 4Q19 revenues of US$2.28 billion, an increase of 7% compared to 3Q19 and a decrease of 5% compared to 4Q18.

Net loss for 4Q19 was US$385 million, which included non-cash, pre-tax charges of US$537 million. Adjusted EBITDA (operating profit excluding depreciation, amortisation, and other items) increased US$26 million sequentially to US$288 million, or 12.6% of sales.

Revenues for the full year 2019 were US$8.48 billion, operating loss was US$6.28 billion, and net loss was US$6.10 billion, or US$15.96 per share. Adjusted EBITDA for the full year was US$885 million, or 10.4% of sales.

“Our team executed well in a challenging market during 2019, successfully driving cost savings and efficiencies in working capital throughout our organisation,” commented Clay Williams, Chairman, President, and CEO. “Thanks to their efforts we were able to significantly improve cash flow and strengthen our balance sheet, despite the financial charges that were necessary through the year.”

“The fourth quarter saw continued improvements in international and offshore markets, partially offset by another sequential decline in spending by our customers in North America. While this mix shift affects each of our segments differently, all three of our operating segments were able to deliver sequential improvements in adjusted EBITDA.”

“NOV remains focused on creating value for our shareholders by supporting our customers across all phases of oil and gas operations with products and services that enhance their returns, improve safety, and extend the life of equipment. Our technology, global footprint, portfolio of products and services, and large installed base make NOV a partner of choice across the global oilfield.”

Wellbore technologies

Wellbore technologies generated revenues of US$764 million in 4Q19, a decrease of 4% from 3Q19 and a decrease of 14% from 4Q18. The decline in revenue resulted from lower drilling activity levels in North America that more than offset improving conditions in international and offshore markets. Cost savings initiatives and a better product mix improved margins. Operating loss, which included US$410 million in other items, was US$317 million. Adjusted EBITDA increased eight percent sequentially and decreased eight percent from the prior year to US$143 million, or 18.7% of sales.

Completion and production solutions

Completion & production solutions generated revenues of US$799 million in 4Q19, an increase of 10% from 3Q19 and an increase of 1% from 4Q18. The third straight quarter of double-digit top-line improvement was driven by growing demand from offshore and international markets, partially offset by a rapidly contracting demand for completion equipment in US land markets. Operating profit, which included US$13 million in other items, was US$57 million, or 7.1% of sales. Adjusted EBITDA increased 17% sequentially and decreased 14% from the prior year to US$96 million, or 12% of sales.

New orders booked during the quarter were US$502 million, representing a book-to-bill of 101% when compared to the US$499 million of orders shipped from backlog. Backlog for capital equipment orders for Completion & Production Solutions at 31 December 2019 was US$1.3 billion.

Rig technologies

Rig Technologies generated revenues of US$759 million in 4Q19, an increase of 17% from 3Q19 and a decrease of 6% from 4Q18. Increases in land rig deliveries and improved progress on offshore equipment projects drove the sequential improvement in results. Operating loss, which included US$114 million in other items, was US$23 million. Adjusted EBITDA increased 7% sequentially and 10% from the prior year to US$112 million, or 14.8% of sales.

New orders booked during the quarter totalled US$211 million, representing a book-to-bill of 59% when compared to the US$360 million of orders shipped from backlog. At 31 December 2019, backlog for capital equipment orders for Rig Technologies was US$3 billion.

Other corporate items

Further declines in US drilling activity levels and ongoing cost-cutting efforts led the company to recognise US$537 million in impairment and restructuring charges.

As of 31 December 2019, the company had total debt of US$1.99 billion, with US$2 billion available on its revolving credit facility, and US$1.17 billion in cash and cash equivalents.

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