Valaris Ltd, the Bermudian-based offshore drilling services company, has reported a dramatic drop in net income quarter-on-quarter.

Announcing its third quarter results, the company said net income decreased to $63 million compared with $151 million in the second quarter of the year.

Third quarter net income included tax expense of $24 million compared with a tax benefit of $30 million in the second quarter.

Adjusted earnings before interest, tax, depreciation and amortisation increased to $150 million from $139 million in the second quarter primarily due to a full quarter of operations for Valaris DS-7 following its contract start-up and higher average daily revenue for the company’s floater fleet.

These items were partially offset by lower utilisation for Valaris DPS-5 and DS-10 as well as out of service time and repair costs for Valaris 249.

Revenues in the third quarter increased to $643 million from $610 million in the second quarter.

Valaris said it generated $193 million of cash from operating activities and $111 million of free cashflow.

The company repurchased $100 million of shares during the quarter.

A three-year contract extension for jack-up Valaris 118 was awarded in October, adding $168 million of contract backlog.

Cash and cash equivalents and restricted cash decreased to $392 million as of September 30 from $410 million as of June 30. The company said the decrease was primarily due to share repurchases and capital expenditures, partially offset by cashflow from operations.

President and chief executive Anton Dibowitz said: “We delivered strong operating performance and financial results in the third quarter, including solid free cashflow generation.

“Our fleet wide revenue efficiency of 98 per cent included a full quarter of operations for Valaris DS-7 following its contract start-up in the second quarter.

“Building on our track record of safe, reliable and efficient operations, we are proud to be recognised for the second consecutive year by the Centre for Offshore Safety with its Safety Leadership Award for the development of our Restricted Zone Analysis tool.”

He added: “We maintain our conviction in the strength and duration of this upcycle and believe Valaris is well positioned to drive long-term value creation.

“While we have seen some customer demand deferred, the outlook for 2026 and beyond remains robust. We continue to focus on securing attractive, long-term work for our available rig fleet to support our earnings and cashflow growth.”