Valaris Limited (VAL) Cash Flow Statement

The OCF/NI ratio swings from 0.08 to 2.99 across the ten quarters, which indicates that reported earnings are not a reliable proxy for cash generation in this period. Large negative net income quarters such as 2026Q1 at -$16.4M, paired with positive operating cash flow of $75.0M, further suggest that working capital timing and non-cash items are doing much of the work. Investors should monitor whether conversion normalizes or whether the current pattern reflects timing effects that may reverse.

Capital expenditure has remained near $100M to $120M per quarter for most of the period, which absorbs most of the operating cash generated and drives free cash flow below zero in several recent periods. The sharp reversal from positive free cash flow in 2025 to repeated negative readings in 2026 may indicate a shift in the cash earnings base or elevated reinvestment needs. This warrants further investigation into whether capex levels are sustainable relative to current cash generation.

Depreciation and amortization of roughly $40M to $47M per quarter sits well below capex of $100M to $120M, implying the company is reinvesting materially more than it is consuming in asset value. This pattern may reflect fleet upgrades or growth spending, though the reported data does not disclose the split between maintenance and growth capex. Without that breakdown, the sustainability of this spending level remains an open question for analysts.

Repurchases were absent in the 2026 quarters, which coincides with negative or volatile free cash flow and may indicate management is preserving liquidity. Acquisition activity shows a $111.4M net inflow in 2025Q3, which may reflect asset sales rather than deployment, and that distinction materially affects how the figure should be read. Investors should monitor whether future deployment favors balance sheet repair or renewed shareholder returns.