Earnings call transcript Q2 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Hello, everyone, and a warm welcome to the Expro Second Quarter 2023 Earnings Presentation. My name is Emily, and I will be coordinating your call today. [Operator Instructions]

I'll now turn the call over to our host, Expro's Chief Financial Officer, Quinn Fanning. Please go ahead, Quinn.

Quinn Fanning

quarter call. second Expro's to XXXX conference Welcome I today by Mike Jardon. Expro's, CEO, am joined

I our will we and Mike First share it for will prepared up questions. open then remarks

results website, expro.com the accompanying our presentation We under posted have Expro second Investors an quarter the on that on section. is

and website, addition, the likewise quarter the Investors supplemental downloadable is section. for information periods In under on financial second prior the Expro

some from such to only the speak remarks materially any I'd contain forward-looking or expressed of subject date remind assumes Company those like that, of implied today's update statements. Such or uncertainties and date. today's Such everyone of refer and by statements statements responsibility actual no forward-looking as may as risks future statements. cause results are differ comments to to could to that to

A Company cause accessed from The that set any at factors filings included on materially SEC our in may these different website or website the be the statements. SEC its on complete has identifying expro.com. in filings, those again be sec.gov, Company's cautionary important language which risks is in more actual forth discussion included to SEC's of results could forward-looking

any defined in most non-GAAP our discussed Please note also found XXXX can to be second call directly are on earnings website. measures that quarter this and comparable during our GAAP financial measure the reconciled financial release, which

like I'd that, to With over turn call Mike. the to

Mike Jardon

everyone. good morning Good afternoon, and

QX slides today. during we remarks will noted, Quinn our the slides with to posted to these refer Quinn Expro of As I highlights website. several and prepared

which second XXXX, XXXX first is relative of and second or to of XX% million, the the quarter our up $XXX relative up approximately As press million highlighted XXXX. in the was XX% quarter of release, by quarter to $XX revenue

provided last growth about expect that revenue growth our and conference favorably XX% in which was about year-over-year. compares and XX% on earnings revenue we call, summary the guidance revenue Sequential year-over-year growth quarter-over-quarter,

reflect results in second areas Slide and highlighted across geographies, on capabilities the a of activity up continued As quarter X, ramp lines. product

year-over-year, was and sequentially QX XX% mix XX% to Adjusted a reflecting higher Well activity construction $XX revenue EBITDA XX% first was approximately XX% million up sequentially and of approximately was or increase $XX well a representing while relative management million, XXXX revenue, revenue sequential more costs. up and quarter, XX% for lower support primarily year-over-year. up favorable

XXXX. was provide guidance EBITDA in the adjusted margin EBITDA quarter note in some XX%, XXXX will XX% was to profitability high Adjusted of as details, range. of trending at Quinn At additional underlying but our of reported margin second the first end positively. I'll compared the XX%, quarter is that

margin approximately of contribution of XX% points. non-productive we by LWI time NPT, approximately which margin related, X.X or million percentage negatively $X impacted Reported what contribution QX includes non-reimbursable, call

of relatively a margin associated for in onshore taking are also with to contribution the we approximately Congo, overall addition, recognition are constructing facility percentage the pretreatment In margin had Eni approach points. impact X.X conservative on dilutive that of which we

we to the The nature. excess with issues that are We a XXXX well sometime should this build Congo of facility the first we operational to book, order to with and Eni through LWI I'm transitory half XXXX. date, our system, has in working be momentum. We have healthy become in started pleased continued on expect and successfully operating project discrete cost and gone

the I Expro's and Expro remain class expertise technical market, additional orders for and service of of reflect breadth work activity. quarter, delivery. quarter, capturing our an new by optimistic second strong million XXXX. improving a competitors, delivered the best of in outlook on $XXX capitalizing our for an our Contract resurgence on a the differentiating portfolio The In and depth is wins we strong

realizing on the manufacturer of I'll the are plus our pleased last Nonetheless, less have a $X is For backlog billion. the backlog note we backlog services to we high Page at see an company certain. of that, revenue trend over same quarter-over-quarter not X accompanying is summarized quarters and the time at the presentation. time appendix backlog reference, all as six a for stable on

in From capacity near-term capital our phase for projects, investment which market been XX% perspective, in outlook. over expansion the that Expro, offsetting a seen long remains constructive revenue and Recent macro of with adding generate services that attract services OPEC resulting development, supporting will restraint providers expected energy and overall the in plus multi-year backdrop a approximately has as activity offshore growth a such suggest very our weaker from demand for particular. FIDs value not decade, cycle and we

by in built dynamics and which a largely driven is by several supply. expect the diversification business, to offshore for driven to international the demand tailwinds favorable a nutshell, emphasis that next activity and is persist and energy supply years, security of we on ride Expro's heightened

is strategy maximize growth this business cycle. medium-term basic Our to

consolidating of and previously targets By our realized we selectively have synergy revenue. facilities, functions XX% our rationalizing approximately reduced cost to non-customer largely announced costs and support facing

now capturing work and lines across more and a awarded new should executing is favorable product business. focused increasing drilling the result team our in Our utilization activity mix. and completions on Improved asset activity

and result should leverage, Continued generation. costs operating and cash improved expansion capital better in discipline margin

will in for pushing and the XXXX. believe provide to our services also we of pricing get second net customers, the to results our that value gains half are that reflect pricing We more we beginning

of expansion revenue implying midpoint We minus roughly of $X.X adjusted margins for the rate $XXX of about adjusted that, full billion margins recent annualized plus XXXX for most year-over-year and will XXXX run year XX%. XXX our EBITDA of quarterly we you full with guidance revenue of EBITDA billion was and year adjusted million EBITDA exit that XXXX or believe $X.X or remind XX%, plus I'll basis of points. margin about

new start Frank's our merger XXXX. we Expro will pricing mid year XXXX. dynamic support and the A activity in with that full we new Despite consistent teen up when of deliver made with are we technologies. revenue financial results top-line combination to growth on investments merger should targets expectations, several early technologies, in a at have If announced XXXX tailwinds current least through operating incremental environment date established synergies, challenges deploying we associated related key and

Let on move continues me exceptional tree. demonstrate is Mexico suspended the In or the covered well Slide now X. to line a delivery of which delay some An Latin in commentary, operator regional had to product completion well North to a on Gulf of America, our construction due performance.

was team pressure tensile, provided barriers dependability, VX high to an weather pressure robust conditions. the prior extremely high well's the operation. require in regulations and operator set to suspension place ultimate during packer another two two for boot Expro's the separate barrier system lower for The test by mechanical completion tough therefore validate systems already rated to offering moving

finish the allowed in retrieved, for to the successfully system. operator our months, the and is well were completion remaining After for well. once five the brute well packers accomplishment This an ultimately, stream of both completion delivered, the isolation is important

Subsea abandonment our Europe as riser a decommissioning a area the of with Moving water we market, Harbor Energy $XX UK Well Africa, Expro open combination a position key Sub-Saharan will the and Access in continental applications. utilize Reinforcing this campaign, plug technology within and the have in multiyear well part for contract new announced shelf. enabler in recently for of the Balmoral million as abandonment project on to a contract with

provide landing In secure to extension customers the and than as We million projects deepwater build. more $XX received continues look continue of to ultra contract to capacity we have offshore see Subsea worth subsea also stream deepwater backlog to Ghana, a packages.

capabilities of have We this and the contract held testament excellent subsea to our landing strings XXXX service team. and delivery securing since extension superior as

historically In Algeria Solutions where and examples the I've discussed flare we conferences, as services solutions being flared. commercialize that in gas help North and investor Middle several our provide Africa, emissions East Sustainable such reduction and Expro's Energy customers to highlighting at management was

loss positive minimizing to oil, by have solution efficiency our region make support energy made demonstrated to mitigate the customers' the of optimization production our environmental cost potential carbon to MENA support impact Utilizing commitment safer, cleaner by significantly We all efficient. customer more environmental operational initiatives. Expro's a impact technologies, we effective, decreasing to improved and commercial in further innovative damage. a helping reduction the and

powered gas customers to to no our and together carbon contribute great world. develop additional ultimately to reducing journey Expro This on solutions to right space greenhouse We the for part slip Qatar to from line away first of move diesel unit an the electric Expro deployment diesel of unit emissions. and this their another as a an is example powered their within deploy working have our type deck pack the the is customer replaces help in lower for with supporting of initiative to a power deployed also This units. electric with customers required

a Lastly, appraisal region, with completed moving exploration first semisubmersible to the Asia Indonesia XXX% performance team our Pacific and score. its project

three wells drill job, of a part As for operations. sampling downhole subsea three Expro direct services successful hydraulic stem well delivered testing and testing, across

Turning I several awards achievements business of few sense the from quarter and with attention X, now a to technology provide which Expro's operational to noteworthy will highlights momentum. further achievements Slide to a call current you

has First, I'm five campaign Subsea pleased line, super the well completed our Offshore for from desuspension to share Well Australia majors. a of positive Access one product operational which results

standard experience more test of access has and well a subsea of solutions in wide and portfolio years fit-for-purpose subsea Expro of than providing reassemblies. range XX extensive bespoke

supported have known than as and strings customer more also operations are which reassemblies, XXXX test Subsea team landing today. our Our

track a increase With primary be next of drilling great team, should over the several completions beneficiary a the years. in expected and deepwater record proven activity we a and

highlighting our traditional the in regions contract the With recent Sub-Saharan awards in Asia subsea momentum Africa and Pacific business. Europe,

and toolbox. Company production rig abandonment. life production Intervention way investment in throughout the ultimate their subsea light capabilities to our customers' the through to intervention with significantly recent expand well Our wells, ability support through deployed from the vessel completion and our subsea requirements the allowed to and both has of Riserless all optimization, Well effectively us cost Providing

related first team. As our system NPT quarter was of the top at I negatively deployed my LWI for the an vessel our in achieving quarterly operational remarks, important but results, on late impacted status noted Subsea milestone

of in We and additional work this Access second us the secured. to focus behind put LWI on half beyond work we first deployed expect executing the that issues of been teething improve Subsea as that's Well LWI our vessel business continue some of will scope and the XXXX profitability of

is the in line with product Global construction quarter. technologies, of which expanded well we the acquisition DeltaTek first cementing our cementing our specials Within

June, the technologies the that continue for interest in enterprise generate the Award. XXXX with market. And to Award receiving Expro the Innovation to market brings We innovative Kings significant DeltaTek recognized was presented in internationally

success in of contribution As the outstanding most prestigious the award Awards Kings country. businesses for UK, celebrates the the significant and businesses the across

record and cementing achievements team the track of reinforce the increase award, recognized at efficiency, cementing developing our clients' Northern its to and also rig DeltaTek has Awards. and In are this the that quality UK's been offering technologies for the addition great to excellent cost operations. Star team's operational to These also of deliver savings, help and to improve deploying time help technology

in product string casing within XX-inch a Additionally, construction team well will utilize Centri-Fi. digital another line, has which technology, the we installed achieved proprietary record-breaking our operation Expro's

XX-inch and America record operations, need minimizing was and running speed, the During of of most personnel the this Latin This intelligent North date. efficient Centri-Fi one in stands red our rack eliminating and the to to offline jobs fastest solution command drill see all the while in the back required XX of zone. control for and region pipe of personnel operation, enabled instead

initiatives energy new our ever are that note increasing. I'll Finally,

to continues on sector. recently our and a increasingly important develop geothermal provider strengthening integrated and the growing board Our to business we as service geothermal Geothermal position an Association, commitment International the globally accepted have

deployment commitment first to This our of pleased evaluation carbon test and well enhanced specific sustainable capabilities a more to share the a and in future. construction, Germany, and test sector, steam. a after that demonstrates customer also successfully rig achieved in our spread geothermal I'm for offering lower they geothermal up

carbon strengthening become as Association. capture, new around are capture, more of use carbon important sustainable expertise and we evolving to and Storage to have to our energy. our partnerships in of This business to new We needs Capture members to grow carbon advance emissions broadly, sources working our advance the storage and the Carbon technologies and strategic lower reduce the industry cleaner, sector, strategy is energy and Cluster recently and further manage solutions Solar leverage and unlock our

European and the again XXXX the pre-pandemic in to stabilize into Quinn, economies over including for XXXX year U.S. guidance, recaps to quarter growth levels recover developing X market of I call and and of we remains as that with the during the China. the are markets, returning XXXX, and continuing our demand full continues and to first Before summary, throughout remainder demand QX positive Slide the year turn In note oil which reaffirming. demand outlook

QX, a prices of for will per is indicates have balances attractive levels prices per floor. Liquid's barrel with feeling barrel supporting currently tightened relatively longer-term XXXX, XXXX. $XX $XX oil at high oil generally for $XX oil forecast This stable Brent EIA's per average stable since that with operators. in and consistent EIA's of barrel more like outlook rising to roughly remain

In Similarly, the electricity we the critical see lower prices, which generation volatile from high continue remain the gas at net view, source global Russia beginning and gas to path will towards structural our robust and stabilized have zero. fuel Ukraine generally unstable carbon of war. somewhat the on a seen transition of a

with exceed levels, energy and and with production, energy, sustainable should grow continued challenged Upstream as to to affordable trilemma investments particularly operators reliable, amongst discipline, increase CIO-CS. secure are seek balanced are to expected and the capital investment, to soon countries continue pre-pandemic as

around uncertainty XXXX services recovery, of and continue we demand throughout XXXX. Chinese solutions sector, grow into While the and some and macroeconomic believe remains, timing the a continues particularly will our the for services energy be demand positive for to to outlook

both offshore our to Pacific as Asia North new International areas Latin frontier in East, to activity and as look in progress is Sub-Saharan and an such Brazil, observed exploration such operators Namibia. Middle Egypt, across continuing Africa, and and Qatar increase, Norway, basins in especially as and increase America developments have Guyana, we Africa Regions mature in Europe,

experiencing deepwater in Africa, strong ultra which for well activity and well. elements better to a Deepwater historically businesses general, and subsea well access of construction favor be management market well Expro In business Sub-Saharan a our should seems renaissance. is activity as flow our and

a approvals offshore to of XXXX. pipeline with poised expected of sanctioned, number in continuing projects exceed to now be XXXX and XXXX to to be forecast climb the and Additionally, between projects continues levels sanctioned

projects, in increase We activity are in capture positive the both storage future seeing also further for activity for conventional indicates future which gas activity, supporting carbon appraisal an and oil exploration longer-term increased offshore and and outlook. and an again, used

maximize relatively to high fossil all striving production With stable while operators also prices, stocked, their the emissions commodity are the and to lines, activities Latin the and intervention driving is flow within for America regions. well demand and especially looking of from production management methane for amount well further across fuel and Asia our operations. reduce our overall related well existing This integrity their Pacific product

life of number economic activity, the assets in of abandonment and and reaching underpinning solutions, a as addition, mature market is In the end a Europe. increasing, particularly there for plug decommissioning is requirement increased growing effective, their cost

combined solutions. and operator services outlook sector and and the supporting prices is Expro increasing increased and ongoing more people Expro raise sector activity, initiatives upstream investments our the value experience positive. of the With All energy to of and a broader for supply, results assets utilization the in continue quite and extract tightening and to services our for

call I'll financial over the hand to Quinn to the With results. discuss that,

Quinn Fanning

Thank you, Mike.

of note charts line. that For have has copy slides, a results reporting and well product results a area as covering our to number capability the consolidated those the appendix slide that as tables accompanying by of segment, of and deck

on available As are including the Expro I of financials of call, beginning downloadable our historical also results combined and noted Frank's at the website.

to or by net XXXX, was $X.XX XXXX. Net $XX to second quarter relative diluted $X per relative up per share, $X the of Now which or diluted a quarter $XX to quarter was quarter million for the of the recap, approximately XX%, in loss million first $X.XX second $XXX to million was the revenue million, first share. compared second and approximately up or XX% income or quarter million of

or primarily XXXX of net $X.XX of of Year-to-date, first share, $X.XX or quarter income to EBITDA. XXXX. income adjusted per per diluted $XX reflecting or compared first loss months compared higher million net $XX per $X.XX diluted $X million was to share, $X.XX for adjusted for share million share, quarter $X net Adjusted diluted million the income was second a the the or net six per of diluted

again Second flat were quarter margin, of gross essentially XXXX. basis quarter was the profit first contribution cash which is to XX% relative

As on of and Mike project Eni related were a percentage about noted, LWI NPT collectively Congo drag our X points. margins

the LWI Congo the our of quarters XXXX. over margin second and overall on contribute of related improve in to couple project activities contribution Eni Profitability expected is in to the half and next should an improvement

Eni margin costs contribution reflecting largely impact related excess and QX contribution project. to point about QX, XX%, dilutive approximately excluding margin reference, percentage the of on LWI the For Congo was in quarter-over-quarter down X OPT

of overheads EBITDA costs XX Support approximately combined $XX revenue. are mix. group costs sequentially. reflecting million million, of than and or were support million to quarter down activity and approximately XX% revenue sequential totaled approximately was below quarter, a compared the are just of primarily more XX% of $XX Second Expro the for costs higher of points, more and XX% Adjusted $X percentage support first million revenue $XX down relative representing Frank's pre-merger. to increase a QX XXXX favorable Year-to-date

margin XXXX. in XX% XXXX XX%, EBITDA XX% compared QX Adjusted and in to QX in as QX was XXXX,

adjusted For basis points margin approximately in up reference, sequentially, QX approximately XXX and LWI approximately EBITDA basis or related costs XX% up was points excluding excess year-over-year. XXX

was page to appendix XXX% As approximately highlighted Expro QX up the our QX approximately full the our prior announcing last XX%, and quarterly XXXX, is EBITDA on which up merger. revenue slide, of the first quarter since for adjusted was XXXX, Frank's

and integration for reflecting cash other prior for severance expenses. and by periods, interest, paid cash before expenses merger adjusted recaps flow slide QX following cash operations provided The and and operating

operating million up the cash QX or was relative XX% to XXXX, XXXX. $XX For adjusted second flow of quarter

revenue Capital $XX in approximate which adjusted second an and about which million, working reflects flow higher EBITDA, XXXX. trend cash from net offset operations QX was higher $XX capital million higher adjusted $XX cash XXXX quarter sequential of by build to were for largely taxes, the by quarter-over-quarter. flat expenditures and compared and million The totaled

to Company $XXX fall loans of revenue. Total $XXX cash is $XXX to XXth. expected full including for liquidity of of cash approximately credit XXXX was as also facility. liquidity draw-downs guidance million, million equivalents should as to the June Total of is quarter cash with that for $XXX million includes revolving end $XXX year X% consistent a was of the X% at CapEx CapEx XXXX restricted range and which million under within prior our available million,

The million approximately approximate order QX guarantees, facility which million legacy payment quarter Securities activities the Company's is of Commission XXth the Exchange and balance available in the bonds investigation. half and the being $XX cash operating internal provided related of is utilized. settle Note June for to cash at during FCPA Frank's currently by to and $X reflects that the

interest-bearing at and no quarter debt end Company interest has Finally, has bearing Expro today. debt the no

and revenue is XX%, in and positive expectation full XX% as percentage plus recap for to costs The is AX. a minus trend a taxes support as support percentage Our for respectively. costs X% on year of of or cash Slide revenue you

previous in the with second in in in of to discussed the build year. a working calls, typically HX, capital As flow cash incentives on result half tending annual and growth anticipated seasonal improve

as and activity higher a will XXXX expect revenue capital to percentage We will moderate and of working continue revenue trend progresses. as

for to continue to be cash year. full expect the a we generative result, As

as free internal free to a percentage revenue remains single-digits. flow of the cash cash mid target margin in or Our flow high for XXXX

$X.XX we noted, billion billion. Mike of guidance As full range revenue between $X.XX for and our XXXX year maintain

EBITDA for of EBITDA of and adjusted million between revenue. of between XX% million $XXX and and XX% For $XXX adjusted margin

to comments. I Mike call a now for the turn closing few over will back

Mike Jardon

open to before all of with Thanks, you key call takeaways Quinn. leave like to three Q&A. up I'd the we

leverage First, footprint, track share being market to a delivering market us This expecting excellent introducing global technologies growth and record, double-digit of Expro markets. and by revenue result our quality. new our operating continues able outpace established growth world-class by capturing service to in and is

us cash improved growth, activity support flow efficient and revenue operating EBITDA more top-line more strong and structure Second, margins driving allow generation. and to free a expand improve leverage, our across

delivering And on finally, results. we laser-focused are

key business One service We the of not quality provider. the because of execution. the of the traits organization is our biggest of win because of execution,

to exceeding implementing successful and and we were we have hard in them. very our synergies plans, Similarly, then achieving because develop strong worked about target detailed we and merger-related set

that, I'll to call session. turn the operator for the the Q&A With back

Operator

the Instructions] Thank first question you. [Operator ahead. Eddie, of from line with Barclays. comes Eddie go please Our Kim

Your line is now open.

Eddie Kim

big up the has quarter. been sequential three in the strong So activity, second ramp pretty that a big with growth team Middle here quarter all the of across reporting East this

You quarter in strong activity this MENA of also Saudi. management posted specifically well and out XX% higher growth called flow

over to other expect well segments several most forward specifically? As about forward flow see of parts is expected Middle ramps growth activity the kind the should up in think in we years, of construction catch East or Saudi the next we to going those up? growth management going should How in two well growth the

Mike Jardon

construction question. is, been Sure. appreciate the so, Eddie, has probably really us for it how guess frame well underrepresented. historically would I been, I I has up

think like our identify I in the talk some places like revenue the about places able to well and were to Algeria. contracts Saudi, some of synergies in ability construction really So first first were we of

continue operators expand you could tied of in construction an well activity what well to the in anticipate Middle have North to well we for as set. And opportunity to opportunities Africa. the with the much more very got management, the footprint it's in Middle our so good level East flow that as of So, East is

on as The higher Tuesday. us, contracts to we up with difference win you So on Middle Monday East is, construction. the and probably growth start can well potential don't into convert contracts show more for

presence contracts have flow in well why able a to are we some relationship the well of have to that's pull-through from able be infrastructure to we place starting that's there, and new and management, been to the some we construction. have win some where have You of to

Eddie Kim

the Do well And versus my flow flow in of seeing in expect NOCs just like already? us segment it well Could typical seeing when the of it. this differences this remind management you follow-up management, Understood. product duration terms customers? we you. net start Aramco line? in or have Thank you the just in specifically. of should smaller second is on half started your other you between that pricing pricing gains year, contract And Got

Mike Jardon

Sure.

So all really for lines, product type our three contracts. of are part, across most the typically they year

at to you kind the a and look simplistically, third been more we a is for are to be about book chance we step-up to mix that, part what much and of reprice if That's So highlighted here up going we have able our of of it a ramp have get of on related. an basis. has annual had the activity reason

seeing not that pricing are a standpoint. We from

We to contracts as to they and some come year well, go two really of of three in of able we that of XXXX, year as the start see essence, have play more in as some into back start end been over. roll XXXX those to into will start reprice to

Quinn Fanning

is least well the contribution is management basis, margins to The well the which in this other of thing have Eni I we recognizing you, a is Eddie, where mentioned area flow is product would been the at business, also are for within XX% year. line the flow solutions on production our in story XX%, part Congo first half of management why as project, that

past get phase expect the move more would operations mode. improve maintenance to that and plant as the we continue this and on year once delivery 'XX, into We particularly and to progresses, in

couple management you a Eni the of XXs is well been things delivered to an say, and there on more hopefully. start I out, related drag wood, to a better, the bit that So in is project's margins quarters that see or which normalized would will high Congo project, flow artificial on knock

Operator

next Sachs. comes go Goldman question ahead. Petrick Alexa with Our the of line from Alexa, please

Alexa Petrick

revenue to strong Neil revenue in you. possible had on I the ask Thank And the expecting this soften do to back are year? for guys This the maybe half Alexa surpass your following quarter, not, guidance? revenue year you if you you wanted then full where Mehta. to is of think

Quinn Fanning

the Well, back kind know, I are revenue the That, this at quarter, decent expecting we wouldn't and material had least soften you sustain say we of, think year, to run of have rate the in in pricing gains. we sequentially pretty a million quarter. we again, per third step-up $XXX circa will contemplate doesn't half

We a that performance. got hand roll the and hoping position billion are that Mike would we awards to have in with contract top-line some expect a new guidance, But certainly onto run to certainly margin billion now rates as revise are least think benefit don't of we I in year to the $X.X at comfortable the and see already are but mentioned, exit at And to the we area. $X.XX $X.XX billion rate. we

Alexa Petrick

Thank Okay, that's you. helpful.

trajectory And in the back of terms on we about the how Just to the think you seeing guidance? follow-up are some half of low are the what variables margins, of in year? of the and should end high

Quinn Fanning

timing up So, showing variability the pricing results. obviously is and of

we delivery also back further mentioned, holding Eni the the Mike along schedule. Congo in been have As get on project until contingencies we on

results. of change I Not terms So a would drivers. those necessarily consolidated key the there is certainly are upside Cargo in in to material be say going Eni project.

that scope put We issues be of teething part on the operating have the an for assumption behind are LWI, we results. negative LWI into obviously, better initial consolidated a the of the the us. a absence positive work will And,

deck the are guidance. slide second year we us in XX% that included comfortable EBITDA the as in primary we those our half drivers which range, finish will make the So XX% to that

Mike Jardon

helps impact when too add what operational? a of quarter? thing at second have net end month up vary -- That's said they end part a is, really only do When as why there. it go more Do part completing of you two wells? I some some wells you is up and part one the half whole actually in contracts we drilling with of do or the of months start in of time, we do Alexa, the XXXX. would is, getting quarter, and pricing those we this range there That's is anticipate some

Operator

& Sidoti with Company. Ferazani Steve go from comes Steve, ahead. question next Our please

line open. now Your is

Steve Ferazani

EBITDA conversations and of pricing assumption I'm does in this way, making offshore point? the So, for rates to become would your expectations obviously, year, on day how year way you out particularly your margin the play of the we as guidance more on be, that rigs. guessing constructive second half earlier does start start plays terms we 'XX? But that are think about the if out, XXXX for strengthening early higher How seeing

Mike Jardon

make two points. I'd guess I

the conversations per About rollover First, our having pricing third of the one. of revenue a Steve, is contract number constructive really annum. timing. what's kind is We already dynamic the reprices

are getting awards pricing a of results. really, higher shows we new in financial until just it's contract So up it on lag the matter and

for earnings able pre-budget to expectations terms conference as of the have provide a are suspect And be couple has We our in I for call, EBITDA been XXXX. we our over our been quarter have at And year least margins point next I XXXX. center peek exit we our would out just the years budget. around essentially pattern, last where of plus pandemic third

margins. exited XXXX So XX% we with EBITDA

starting suspect XXXX the exit minus plus again, margins. we area. the in 'XX point XX% was XX% to XX% And will be budgeting cycle. EBITDA guidance that or our the year for for I Our expect to

Steve Ferazani

Thanks. Perfect.

Mike Jardon

response... That

Steve Ferazani

of terms -- In what's that?

Mike Jardon

answer question? Does your that

Steve Ferazani

Mike. Thanks does. It does. It

projects, technology have you In on updates are flow? a particularly more higher what's cash also are flow, you of thinking revenue, of thinking on you how take of how that some potential and becomes cash uses added the terms of you as the about about just percentage new CapEx

Quinn Fanning

business even lay start guess, to the invest with out throughout over we thing there CapEx X% X% first we of allows we revenue in have business. we number run to off the in is, to would can the I world. that believe of for everybody I the of Steve, the a years, have invest continued continue And business. those last pandemic to type us things the and course That in to tried

continue of will that. we to kind work So at

make think globally want a good the a us fleet. And diet, for don't I us on it to we sure, focus maintaining projects, but is CapEx discipline. we capital it's re-deployable have we I thing just call and

moved be can assets. can that's happen So that same a for Brazil, use those going for project assets we to we Malaysia. in can in use They Petrobras,

to latitude with diet. So, that, continue flexibility CapEx we that X% of some kind that gives within X% will but to operate us and

Steve Ferazani

thoughts cash -- tends to And on use you second the then no noted, flow updated on particularly quarter. half? thoughts this be Any of any cash, better as half buyback updated

Mike Jardon

other reiterated that probably related of depending correct. guess, which we commissioning on a It's $XXX That's upon LTM and to million give couple costs. use, LWI million, call was in just comment after EBITDA. last flow worth definition you highlighting and that's a the $XX made And of data I up today. points start cash I

kind transferred. cost So had be these believe prior of Mike we mentioned, that to to

are million CapEx in that We for plus $XXX LTM a of time. and million was same period EBITDA, $XXX

terms $XXX flow in a build. frankly, our minus a code million six over the of in been zip So Quite proxy. capital cash kind are challenge four we to as been has the large of has challenged as CapEx working EBITDA quarters the industry relatively last

at quarters balance percentage will that start of couple to over sheet difference cash of of on is, in maker of base, cycle, the that's a given even to balance an next But capital. see That's kind reversal really environment flow the customer the matter we expectation the activity fact the reverse working bit cash And pressures we hand, the i.e. sheet with revenue shrink moderate. in and capital is the in as bloated. what working but a the can of some our need this the is point increasing is, of

We more at be of flow would current kind seriously realization. that market cash part, we of buybacks. this were because of wouldn't in the in the pattern I looking of quarter, suspect out

to liquidity. since of We that, improve want to was done didn't one we the also a primary obviously, across in work goals with quarter, first trading purposes secondary had which,

Operator

[Operator Instructions] with next Our Lemoine Luke, question please comes Luke from Sandler. ahead. go Piper

Luke Lemoine

Good morning, Mike, Quinn.

half growth of is and Can be fair talked margins assume you You 'XX, mid-teens least above are for could about since suppressed which Eni next at underpinning first And streets, to growth some being through on levels in It's project. you in XX.X% talk what's Congo about 'XX? were growth? year. the conservative this normal about the 'XX, incrementals top-line there

Mike Jardon

there a it's travel was customers. Asia several I in throughout time to our really earlier, question, very customers, But said in awful activity. tell of Quinn and you have spend and having through I much go an last months Yes, is What I last with as all the Luke. And had week. phase. lot can of good continues discussions with strengthening kind is be pre-budget conversations level the I

just are hiring type as a people? those look things? some training at and for and asking just What's that, see sense I programs? recruiting lots guys strengthening region-by-region, there. really your of continue kind with They we of happening we questions to how positioned around, with activity get are happening What's project-by-project, you

kind tied wells as be why we a of to for wells growth year, we of into going strong mid and with And are that. it's There said a teens to we well is being drilled very next being that's have particularly levered new level new numbers, pre-budget activity construction, that think translate we as and completed. probably

Luke Lemoine

Congo this 'XX. the or how first to second you XQ, which you go could in Okay. then about a project, more or of the XXX this in approach to impacted operational and is bps talk your if And you impact margins talked a half not? half of the said about releases well, Eni half first 'XX believe conservative you by And I Can continues margins? contingency 'XX become

Quinn Fanning

along remainder is essentially intention get about need being it. and all in. as which which first O&M we that's at $XXX a consistent large kind start release an recognize the of margin that, mean, was the half phase, would we will contract of I the on equipment more the with we sales, delivery, to plant of million contract the really, But with the service the closer will contingency delivery diminish value, level for to was

would go Obviously, expect to margins. phase substantially things need at but plan, we to according that that would be O&M higher

the of is carefully, POC making we with accounting in I have will, that tried if was margin recognition. So it terms point you really,

XX% date on to have we that recognized get closer we But what sub date. release as are to to we look to are margins closer. delivery we So, and we start will

Mike Jardon

be going phenomenon. most of a XXXX And Luke, that, it's to

Quinn Fanning

We to first in the half 'XX. delivered have scheduled be of

Luke Lemoine

Perfect. Thanks Thanks Okay. Quinn. Mike.

Operator

have we the are for questions today. Those all

the comments. back the So, team turn I'll management closing call any for to

Quinn Fanning

Thank Emily, time appreciate disconnect. up everybody's great. on we effort today, the and and look catching We can you. next go again forward and That's quarterly call. to

Operator

our Thank you you today. us lines. may concludes everyone for and call joining This now disconnect your

Expro (XPRO) 27 Jul 232023 Q2 Earnings call transcript