Earnings call transcript Q3 2023

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Operator

Good day, everyone, and welcome to the December Quarter 2022. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question-and-answer session. [Operator Instructions] Please note this call may be recorded.

It is now my pleasure to turn the call over to Red Tilahun. ahead. go Please

Red Tilahun

Executive Good December Nicky. joined and to Financial and welcome the Vice and Thank and President and morning, XXXX Group's Chief Chief President our quarter today Jennifer am Chris earnings Bristow Bradshaw; call Senior Whalen. you, Officer, with everyone, Officer, call. on I

risks the are statements like call, management this in I'd begin, opportunity that we on of of subject take this Slide that to our make course forward-looking and remind more detail Before investor to everyone described are to that uncertainties during X may presentation.

act investor to You our may our website. on presentation

release We free our non-GAAP cash certain measures investor financial and reconciliation A as earnings of such EBITDA included will and also flow. is to presentation. measures reference GAAP such the in

turn call CEO. our President now will to the and over Chris? I

Chris Bradshaw

and Thank to everyone. call, the you, Red, welcome

begin once with is our always, prepared calendar Company The Bristow's As very December XXXX. in quarter important and the note which highest core most our will value and good safety again on priority. safety, performance I remarks achieved operational a

world Bristow of members Safety quarters, Bristow's the culture. and number workdays our has all more Over Zero for their thank to total than dedication our XX%. mission of to the by decreased the I recent around continued Target want commend lost team and Thank you.

to now operational recent Turning highlights.

and for Netherlands, operations government Guard. to contracts the and for Caribbean new helicopter successfully on the fourth quarter, services launched Bristow During provide search the rescue Coast separately Dutch

behalf Netherlands park. SAR Den and helicopters the is work Helder the operations, delivering a post on utilizing Airport Netherlands XX-year AWXXX critical The contract, Midden-Zeeland at of

of helicopters utilizing Saint ranging and Allen Philly, the from the the behalf contract, delivering the to The Dutch Caribbean Dutch Dutch is Caribbean work Guard. critical in in Coast on South SAR in North, Curt operations, Martin XX-year AWXXX a

our government honored are to to services these mandates important systems. add growing We two

our have XX-year from of terms support January, in the The approximately basis. bear equipment U.K. at plus equipment SONIA coming Bristow to and XXX used obligations in to contract refinance to amount the aggregate previous for they The under financing proceeds £XXX interest the the equal new In Company's financing SAR a two million. facilities an and with due entered were installments due rate quarterly repayment credit facilities into

pleased were our sheet part these balance protect approach and strong we industry-leading complete capital. to We liquidity believe Bristow's And position. to of transactions terms of as Bristow's the financing continued demonstrate access the to

financial over and now our results will CFO Jennifer? for of to guidance. hand updated XXXX the I it a quarter's review

Jennifer Whalen

Chris. you, Thank

our As Therefore, XX the will year-end previously we fourth on today March of announced, changed fiscal from to the XXXX. XX. quarter focus December discussion

present exclude As reminder, that changed a losses business results of sheet to currency balance and last gains in the presentation in to losses the EBITDA other foreign reported income that we our foreign operations are adjusted are of non-cash items. clearly. primarily relate more beginning and These quarter, gains to other income are and exchange reported

special quarter items, million. in the begin quarter the dispositions foreign or an million third for financial compared adjusted exclude of asset of Bristow's the EBITDA an quarter approximately increase will I million Today, results. $XX.X $XX.X of sequential XXXX and to was to with $X exchange analysis of comparison fourth

expenses activity higher expenses costs, $X.X and General higher primarily subcontractor to were Operating costs. energy. commencement of revenues increased due contracts Operating to revenues new $X offshore government higher administrative personnel and were the levels million, in primarily and IT-related million due by to due $X.X million, to higher lease compensation higher primarily services higher and expenses. due

which foreign currency EBITDA comprised we is and from gains primarily income excluded calculation. As our noted previously, have non-cash losses, other of adjusted

XX Difficulty] we last quarter, calendar for announced to have year [Technical guidance XXXX we XX. initiated As

our on financial As discussed, effect foreign results. a currency has significant

in With the million increased to we've anticipate of to our to average Pound foreign billion British outlook. financial relative to $XXX be dollar the U.S. to We range of British million over when revenues $XXX last $X.X excluding dollar strengthening asset months, few the the Sterling X.XX. and exchange Pound $X.X an using billion with EBITDA, dispositions of U.S. exchange rate the adjusted of

total We related also change expected ensure to transition. SAR SAR CapEx increased our change. acceleration XG is to a that flows, execution is outlook spend due announced in and an of to previously cash XG Note to contract this XXXX U.K. CapEx the spend of not timing successful

Finally, Bristow continues balance benefit to from position. a sheet liquidity and strong

million $XXX after XX, liquidity December $XX of purchase the to million PBH our buying. of $XX million of cash the related outflows As for was available and aircraft

model As still business will flows. to believe continue we we before, cash strong have this generate that stated

At this the for turn call time, back further remarks. Chris Chris? I'll to

Chris Bradshaw

Thank outlook now Bristow's you, Jennifer. some will provide I highlights on additional business. the for

Netherlands, provide has to full services in Islands Our benefit the business SAR grow and the the contribution contracts the contracts. a each continued see the will region. Caribbean attractive of Company. of stable cash leading and Dutch robust for Falkland These government XXXX foundation with now from U.K., the a long-term year includes services these flow

of continue are we other government services offshore multiyear cycle. addition, the The contracts, energy is growth in we involved government currently active market in tender innings and believe early growth Bristow In well a positioned system. of the is for processes services to our

for again from the few and years over slides offshore increase in once data analysts oil spending a in outlook the We upstream and third-party our earnings tightening for presentation next gas have a summarize supporting significant market included helicopter. that

XX% increase spending 'XX. growth cycle XX% this expect and multiyear to Research a They Barclays in XXXX to As continue in 'XX. in on noted XX, increase by offshore Slide following XXXX, expects

offshore on for slide, helicopter. balance activity a the offshore Sea energy does covering Analytics. firm, current The who his helicopter Air On data tremendous the offshore very at increasing and we from Robertson industry next the market Steve is show supply in job a & constructive demand driving

as as work time heavy S-XX way AWXXX At very be demand. for expected meet we for would would the the new both HXXX be to best last increased contracts the that on models helicopters, market super helicopter medium expected we this and back that medium idle And the year, placing market AWXXX tight. well helicopters

chain serviceable to that that supply eliminate the The have number overall market than repairs today. are therefore, the parts tightened delayed more helicopters for and expected. challenges S-XX Due quickly has even

little can start, you see As the market in [indiscernible] there very is now. utilization capacity available in

in combined increases the the in global net labor is significant tightness leading-edge market, force rates. in resulting This with equipment constrained

second the in XXXX Bristow's of the results will to back-end We in expect that weighted improvement the half year. financial be

weakest year shorter daylight as will and to our is the operations. As seasonality quarter implement quarter first recall, due the you of adversely impacts hours weather calendar traditionally

In large will first addition year-end. part of in aircraft, idle to concluded a that the year typical at Guyana we contract more seasonal pattern, see

North view year. run the Sea. We at which higher terms the of won process like in supports be been rate year-end in begin EBITDA places Mexico, have the on year, our reconfiguring Gulf half significantly Those are Brazil and those transitioning contracts and are the that and later attractive scheduled contracts of aircraft other than will that new to this U.S. of for first this the

business encouraged in the for by improved outlook In summary, fundamentals very we Bristow's XXXX. are and

and are of While the robust offshore will a the a magnitude fixed full cash activity forward. we flow strong improvement, somewhat drive services business U.S. that recovering this growing energy going confident generation increasing is business wing masking dollar government

the let's line that, With questions. open for

Operator

We'll Instructions] ahead. Evercore our Chris take from [Operator first go with ISI. Lee question Please

Your open. line is

Chris Lee

This ISI here. quick of is Chris Evercore have questions Wise. from Lee I for James in filling a couple

ramp-up the multiyear discussion first around question the is given revenues of what Services, Energy growth and Bristow? all the is, my timing for So Offshore in cycle the

Chris Bradshaw

thanks the Chris, question. for

into So, of start by year. we throughout of the course Bristow. have contracts this have number are scheduled them secured already new that been and entered won to A

of Some weighted. them back-end being

Brazil, new They in a successful rounds we've the in recent in scheduled are example, year. in start with helicopters. tender second contracts half For to this of for been number of securing Petrobras AWXXX

We're southern a begins we of as new the to year. them to desired to their September those announced Brazil. year, in this provide down that contract of the part search of Equinor contract for the we and and last currently rescue for in were Also, transitioning successful Norway process large end preparing services towards in winning of then configuration aircraft

in the contract support of ramping in of as Gulf the process additional Nigeria U.S. as currently well up also for Mexico. We're

So of the utilization throughout see the driving offshore course fleet, services. of this to calendar year, stronger revenues better we're to cash going and of higher continue our out flows

Chris Lee

Got you. My follow-up is. question

line? what of mean about the the as You mentioned combined rates. chain labor net perspective? Company the in specifically force, global bottom leading resulting the increasing, and also market, kind like costs is significant in increases constrained And for Bristow this that edge what tightening are in supply But does the in labor like with equipment

Chris Bradshaw

Yes.

pressures seeing are our we So, some structure. inflationary cost in

of. structure. We have You the mindful that, us have benefit important It's obviously, of a for a around globe our referenced maintain to we labor. to something number and unionized. on That's are competitive visibility workforces always compensation be that good because fairly do

And multiyear union agreements. some so we in have, cases,

driven have of some by that inflationary area long-term balance net cost PBH some the security are definitely amounts by we're and experiencing. increases on costs so do structure the power and what in with will those chain supply the do tight support be. that well case rate visibility again, have above which that's, We visibility the what It's fortunately Supply seeing market. So, we another are. agreement. that is or the our increases, hour we're the And

Chris Lee

Got you.

Okay.

currently is, question see wind my work bit okay. of Do the industry? overall potential if in you're world? more in doing to and U.S. industry to From and Europe. the here need in it that's space what understanding, you in offshore helicopter small anywhere the the offshore growth one space So or viable Bristow lucrative offshore for for the And would wind a be happen

Chris Bradshaw

that that in that's growing offshore U.S. Overall, a be parts today. already activity U.K. will Asia. we the we of an and on fairly important offshore of and mature in are market the Europe You're taking industry transition believe place energy in Northwest a nascent It's a correct wind small-scale component wind the It's supporting market globally. really the here

pipeline However, of a United have that there handful final to in in investment to the a up States. decision. the been proceed are projects approved years evaluation for large future here have that others in are There been

think we that will again, market grow. So overall

for specialize and role offshore look a market, Europe, is of companies question a a be think Again, in is smaller if Northwest the to currently the more segment. are of will be industry that mature already who I the opportunity what helicopters there helicopter there. which for to Bristow much will that support we how number

look market. consider they're an to opportunity so And evaluate what the and doing as to we that and also can them enter

helicopters offshore evolution the supporting offshore where now, to there's U.S., in underscore there as there -- coming. But aren't industry, are are in we of will just projects be the Here the the yet. no in no because wind we believe of U.S. there the do

So, overall, market. a it be will growing

an how customers -- customers going there's demand. returns specifically and we helicopter and to open determine the return meet lead obviously thresholds. conversations will evaluate it think offshore with much that to are for I as in expectations our to are And Bristow, enough rates need financial question then potential whether to to

Operator

Company. We Benchmark go with will our take next question ahead. Josh Sullivan from Please

Josh Sullivan

execution just Can U.K. by you CapEx need it new contract relates accelerate expand contract? to risk? And you SAR then government on as what the to mean

Chris Bradshaw

Sure. Happy to address that.

amount for has It's the the we'll that contract not of state is same. aggregate that thing CapEx needed changed. First

forward the have timing expenditure. We the pulled capital of

time saw start up important to which an complete in case ensure be configuration in to time Looking the us that of contract. final and line we better the opportunity we'll to assurance for give at successful aircraft earlier, the bring to contracts, able modifications time will that on the XG SAR startup the

is, able really, be amount that successfully. change and an forward to on assurance in enhancement on is, what pull So of capital, it time start again, aggregate the no the a timing of we'll

Josh Sullivan

services. opportunities two Got and as the then in far the order to it. scale I and drive addition government outside of going structural SAR drive to is but relates what the How other coming And structural I should as as to announcement opportunities about growth increase that, it change COOs, new recent of think, we tenders be in thinking Irish think that change? up, that

Chris Bradshaw

One existing thing clarify question. you that, is Thank the is the for really a of to upfront this want team. realignment I Sure.

or markets realigning services in end core change overall the team G&A, a spend around and existing but services. the of offshore government not So,

timely get adapt those to what think of I needs do our key in each us allow fashion. their and customers in will it is a to closer and be better hopefully in address markets a able one way to to

drove in really jurisdictions. services government Specific different is services, the things increased to significantly operating that's scale our of complexity internal in now a number the one that and management government of realignment there has

is So, the warranted. think focus we

I the having opportunities allow additional of better think you type team. the pursue it by that us will that mentioned to focus of

Irish in today. an that is we're actively Coast Guard opportunity participating

exact While expectation well sizable anything and we announced important is that obviously months, but the we're not next will summer. don't positioned know that be of taking sometime this over date, the there, the for believe new winner the few We granted. contract by

we Beyond continue believe think participating couple grow. government processes time further there the not But Norway additional opportunity Australia. support opportunities that government set. and to are nationwide realm the in will lines like tender we that, again, in And in down be those in places then of But and portfolio are we may services, yet rescue services currently Europe. search a smaller the looking line,

Josh Sullivan

chart It looks the current on for lease aircraft? of helicopter you have plan? those growth strategy have part are pricing? Are then for for the XX the for there XXXX. still you they that And of utilization waiting better use yet. in the off-lease like about you the not What's Are

Chris Bradshaw

So, are into aircraft of some new we flexible bring do the Company. to some orders, which have

In out SAR AWXXX, will firm configured have terms become of U.K. right XG our orders of the fleet. what's six that now, we helicopters for part so new

to also services we for We ability SAR energy in need the offshore AWXXX have or helicopters opportunities if either opportunity. them bring more

fleet. So specific to that's the Bristow

comes of from at Robertson configured that global This of entire terms is looking & on that Steve the XX was In presentation, fleet helicopters. data Analytics. market Air at the Sea of presented Slide offshore the

the very similar the middle will XXXX. calendar where for of Some AWXXX data, medium HXXX the and specifically and was super the kind that to then look XXX it of aircraft, of

seen whole tight equipment significant S-XX on in increase industry, in that bigger markets increase line, graph, that a industry. effective discussed the we what reflective really on is input rates And this you've certainly utilization. again That's meaningful is the leading-edge the the The really, an again, change which earlier. is where of into a for

Josh Sullivan

it. Got the operations. dynamics Any the upgrades? us? you then wing fixed Where reveal you side one maybe on market in demand fleet And on are can the for

Chris Bradshaw

with we're lessor. Australia, market that. lease working We're at some additional the In business. Those XXXs opportunities Yes. new North really in through looking for bringing dissolved still Air the

expected. a purchased going the last bit keep actually EXXXs So, to two transition. little time of line some going we're to the XXXs year those to for we facilitate longer than We complete we're need to

in EXXXs business. attractive I looking it's think transition bring larger forward, North EXXX take aircraft to moving to Overall, the we to still time little more in on complete terms Air from to a the are but the the going

Operator

go our take ahead. next Steve We'll Research. with from Please Silver question Argus

Steve Silver

guys a that included I value presentation, at you noticed it in a suggests trading your and currently asset shares significant net slide are discount. the

stock might attribute value and current NAV. to view the of disconnect Just speaking, curious what was current the to how broadly guys you I just the you

Chris Bradshaw

question. Thanks for the Steve.

publish practice, disclosure our For of Again, background bit did annual year. a this derived. NAV we this is how little our on long-standing

owned a of we for once aircraft value. $X.XXX So the in what's we appraised and billion receive appraisal third-party year, That's value all of that helicopters have aircraft third-party is a in reflected that fleet. the the

obviously to difference, $XX trading again, price that. per fleet get is for to at asset $X.X current number in the the a a a upon that book on value We substantial which the third-party net number, of the Company, is again to based share the liabilities share NAV assets discount less the roughly which value, net to aggregate translates per significant then the appraisals other today, take the billion that share

aircraft we the on including as closer note basis a amounts you'll they relatively in that you've sheet periods much the as last would tend the on disclosures, of few couple net financial over in current years, XX-K. seen I our as over and losses time, over to gains sold see carrying with them we're recognized our the balance small last be to

really S-XXs, terms the the the medium, that tightness which are fleet the the then the In in the market, constructive of of medium newer aspect back for the discussion in support question secondary seeing terms had market. generation, how utilization short in question that of super we think to helicopters helicopters, current the them those AWXXX are value, the we values we for or such given fleet in-demand and being today, in referencing and trend those equipment about on the helps of most a values supply a that number

Steve Silver

whether you expenses. expenses guys you role to And helpful. mentioned any forward? just move the did in CapEx the Can accelerated financing play just That's capacity recent you Great. discuss have debt Bristow's guys near-term those

Chris Bradshaw

that. Happy to address

the the expect existing had, XG all So we well cash our both years. needs capital with over balance and SAR generate we the as U.K. as to ability have resources the to that the fund we coming that cash of months on already sheet

in to take equipment However, an capital structure, slightly did the financing to opportunity upsize optimize we the order facilities.

there's million and that's financing. that an roughly an refinancing of that brought we incremental when optimal just capital Company an after So paying structure. more roughly fees looking transaction completed at into in Again, January £XX we the incremental

up U.K. the of important the and this to needs into will confident really decade. contract the to see the United what people look ability is long-term to of we we know provide to support continue SAR middle the to attractive the We're well finance an Kingdom service have us that XG starting the next forward

Operator

over will call. now the call to turn Chris remarks. closing And for that concludes our I

Chris Bradshaw

Thank joining for the and everyone, thanks, call. you, Nicky,

The eight seeing has business. been also more have a Bristow's optimistic better than for government a services seen fundamentals market productive We're can We're you last the have as certainly business, that growing. across really our offshore much in significantly. energy for which seeing which has that As we've fundamentals see, years. we business, very outlook improved the

of So reason Company through the improved course for of and XXXX the results for optimism for a lot beyond. move we as

I next to you. quarter. and appreciate again participation speaking look Thank forward your

Operator

your And you for this does today's Thank participation. program. conclude

may You time. disconnect at any

Bristow (VTOL) 9 Mar 232023 Q3 Earnings call transcript