Valaris Limited reported a net loss of $39 million for the first quarter of 2025, compared to a net income of $131 million in the fourth quarter of 2024. This net loss included a significant tax expense of $194 million, primarily due to a $167 million discrete tax expense from establishing a valuation allowance on deferred tax assets in a specific operating jurisdiction.
Despite the net loss, Adjusted EBITDA increased to $181 million from $142 million in the prior quarter, driven by higher revenues for the floater fleet. Revenues exclusive of reimbursable items rose to $578 million from $548 million in Q4 2024, and total operating revenues reached $620.7 million, surpassing revenue estimates.
The company generated $156 million of cash from operating activities and $74 million of Adjusted Free Cash Flow during the quarter. Valaris also secured approximately $1.0 billion in new contract backlog since February's fleet status report, increasing its total backlog to more than $4.2 billion.
Operational highlights included a fleet-wide revenue efficiency of 96% and recognition with the 2024 Best Safety Performance Award for Jackup Rigs from the IADC North Sea Chapter. Valaris also completed the sale of semisubmersibles VALARIS DPS-3, DPS-5, and DPS-6 for recycling in April, following an $8 million impairment loss related to their retirement.
Additionally, five Valaris-owned jackups leased to the ARO Drilling joint venture received five-year contract extensions. This secures long-term work for these rigs and reinforces the value of the ARO partnership, contributing to the company's robust contracting success across its shallow-water fleet.
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