CVEO - Earnings call transcript Q1 2024

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Operator

Greetings, and welcome to the Civeo Corporation First Quarter 2024 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Regan Nielsen, Vice President, Corporate Development and Investor Relations. Thank you.

You may begin.

Regan Nielsen

to Quarter welcome Call. Earnings and you, Civeo's XXXX First Conference Thank Interim and our by Officer; Chief Civeo's led will and Financial Dodson, Brewer, Today, be and Bradley call Treasurer. Civeo's President Barclay Chief Officer Executive

Before the anything many forward-looking that To regarding by caution harbor statements. in on historical law. than we of information, in we such the including today should business, that the protections remarks contain the our we're would relying XX-Q begin, remarks and to disclosed read that listeners like federal other be our factors other risks SEC afforded extent please Any XX-K, note uncertainties our affect filings. context and Form safe

I'll now turn call to the over Bradley.

Bradley Dodson

segment in joining guidance earnings for brief first will and conclude level on Thank quarter full you, the XXXX us provide quarter first for XXXX Regan, open regional the today quarter We'll financial call. assumptions. and X key Then takeaways. full underlying takeaways the start were expectations. performance. One, and quarter with the the first of our a and Barclay for our summary year with thank comments then through I'll all on go the key review, XXXX first our for the line year questions. The updated with and and call outlook I'll you

our guidance. to year no full a change there's As result,

particular due EBITDA adjusted in villages. to XXXX Australia was billed Secondly, strength of rooms to up compared our quarter our X.X% own in first

improvement business terms and services from benefited in in and recent Australian-owned margin. also contract villages year-over-year We wins of integrated

dividend return our to capital through continue quarterly Lastly, and repurchases. opportunistic share shareholders we to

update to X moment the a take segments. across me a provide business Let

to our to exceptionally experienced million plan the $XXX We quarter, on team business of Australian our Australian segment our well integrated line top XXXX. during services Our by improved continues customer buildings our business. our both diligence performed to Basin grow execute contract spending in reflect and our own benefit of across integrated integrated business recent including wins business, our the Bowen that growth and services year-over-year and services

Australian-owned our year-over-year quarter, significant the continue villages experience to During growth.

declined, healthy these prices While recently customer metallurgical have remain that coal levels at activity support prices levels. very

are we to the the macro substantial focused our the in coal production year-over-year impact more the who increasing on factors, sold mines producers recent These are contract being levels. coupled seeing driven impact metallurgical region, Additionally, with of growth. of have wins

team's quarter, continue We continues In Australian plan results. integrated year-over-year business improvement positive this to the our services to experienced should margin as XXXX. our efforts demonstrate throughout from our see first benefit innovation

believe contract we is the area. the service integrated attractive for margins, improved opportunities particularly the given this outlook business With additional terms in and

demobilization Canadian camp adjusted particularly expected, activity, decreased mobile revenues the including in planned year-over-year $X.X the costs of first quarter. business, million As in EBITDA and of wind-down our our LNG-related camp to mobile due segment

the remainder As net recognized completed sale during we our earnings of XXXX, in majority recognized in on received the of The our quarter year touched our all with the McClelland this of -- fourth February conference Canada proceeds. and proceeds call, Lodge this earlier the quarter. were in we Lake

proceeds calculation. of adjusted our from as As and related the well are excluded other the entirety sale a as EBITDA reminder, associated reimbursements costs

business-related guidance. opportunities we continue sales assets. our year and pursue complete, not to transaction assets related the full XXXX of the EBITDA result, a does these As now impact adjusted transportation is to The other

I Barclay stepping interim Brewer, to like over for CFO. interim CFO thank role. would Barclay? our it turn him into now the I'll up to

Barclay Brewer

per net million us Today, you for all diluted $XXX.X thank or $X.X loss with we've million share. revenues Thank of reported joining you, $X.XX and this first the total GAAP in Bradley, morning. quarter a of

Lake Lodge dismantlement of we quarter, generated the million and the Again, cash $X.X the financial flow of Operating this million. $XX.X is first exclusive assets. impact of McClelland flow million. of cash adjusted the During and of sale $X EBITDA free of

rooms partially villages including LNG-related increased mobile quarter expected due the to by our $X.X at wind-down integrated year-over-year mobile Australian business, demobilization offset services activity, increased and Canadian adjusted the in million camp improved EBITDA camp of costs. First billed in the the Australian margin

Let's now first X results quarter for turn our to segments. the

of of I'll first year segment begin in with its a ago review performance the compared the to Australian performance a quarter XXXX.

quarter million, $XX.X our rooms first increase to up last First $XX.X and services were year. Adjusted million improved was to quarter dollar, million increased The was activity at to EBITDA and the million despite the quarter our the relative $X.X XX% billed revenues approximately dollar increased $XX villages, a segment respectively. and the which adjusted adjusted in weakened $XXX,XXX, Australian for revenues EBITDA of from EBITDA strong decreased Australian from Results million. XXXX. margins. were own up by integrated significant of from $XX.X headwind due U.S.

in up due XXXX. average from in is This of at rooms rate the for villages in Australian contract rate quarter the $XX billed first XX% customer demonstrated the year-over-year. daily Australian recent quarter $XXX,XXX the our first source dollars in strength, U.S. was to XXXX, down $XX daily XXXX. dollars the with a X% Due to average villages up quarter of Australian in quarter in of from of was modestly XXX,XXX dollar, weakened the Australian The our awards. demand own first rooms our as were by increased

We the the to to from a Canada down was $XX camp million, activity, the the LNG-related expected mobile The Turning in can of recorded Adjusted $X.X XXXX. in Canada. $XX.X quarter demobilization primarily wind costs. XXXX. by sales revenue million million first adjusted of of including the and mobile quarter $X.X million EBITDA of $XX.X of year-over-year of revenue Lodge decrease of decrease was EBITDA McClelland in Lake revenues compared first million as and driven

Lodge, million the which in increased of down dollars from daily of quarter, During in $XXX,XXX segment the were in rooms both Lake our $X.X maintenance to the to was quarter was related were XXXX. expenditures the first rate in On XXXX. quarter primarily which $XX $XX, spending on to village McClelland quarter totaled Australian during lodges coupled for capital customer slightly Canadian periods a XXXX, the predominantly in activate in period million XXXX compared a $XXX,XXX, to the U.S. our first with of basis, expenditures billed for Capital spending due first lodges demand. villages, with same consolidated room $X.X our from of sale Canadian the and first rooms increased

of quarter call. $X.X quarter that XXXX funding in capital conference the expenditures on Australian Additionally, upgrades million the prior first have discussed infrastructure customer on included we

XX, XX, XXXX. slightly December $XX.X debt net was on XXXX, down Our March which million, was since

maintained leverage quarter at X.Xx for as ratio -- remained the XXXX. flat March of net XX, Our

our had revolving in of liquidity million $XXX.X As facilities March beyond of available and growth million leverage hand, approximately opportunistically XX, while total on XXXX, pursue ratios. cash giving million $XX.X to the vectors and maintaining $XXX.X credit of prudent strength XXXX us flexibility we consisting and under

of our dividend as XXX,XXX our Turning for May that our total to fourth repurchase In the Board $X.X of a of capital This payable $X.XX will program have repurchased share of first a XXXX Directors XX, on XX, million. cash morning, approximately quarterly record XXXX. dividend allocation. shares payment. June per receive declared quarter through Shareholders we announced XXXX, share approximately of we

XXXX. over full that, turn Bradley? discuss I'll our it Bradley guidance to With to year for the

Bradley Dodson

million versus $XXX guidance the beginning full including revenues, for of I'd of you, to a discussion to million to now $XX year dollar our $XX of basis, the on which are each guidance adjusted consolidated year for the and full $XXX the maintaining our million turn our after updated to million the adjusted weakening XXXX EBITDA like Barclay. regions. Despite Australian Thank year, EBITDA. we XXXX for revenue and outlook

$XX our adjusted EBITDA cash capital Based of on million million. million, expense flow approximately million, $X proceeds and of capital XXXX our $XX expected maintaining Lake of cash taxes to dismantlement guidance we million an million, and free $XX year interest of are million $XX XXXX of and are to working expected expectation CapEx guidance, full cash Australian maintaining this an $X of $XX adjusted and $XX related cash We McClelland expenditure sale Lodge million. to net inflow

I will early as Canadian oil is early activity but in season expected. by for turnaround outlooks now are assumptions the provide the corresponding of up the and sands lodges, Canada, our we regional shaping region. In underlying stages

call, guidance. XXXX further provide the rooms billed on consistent previous will We quarter across second but our updates our portfolio with is

camps, process. mobile the and complete mobile majority our of rental Regarding demobilization activity is the our are continuing we

million expect We quarter by our to the costs. XXXX, second demobilization second demobilizations of adjusted be burdening quarter $X approximately completed EBITDA in

this reminder, guidance. a in year XXXX is As full our contemplated

own and incredibly Australia, remains to it levels going to expect villages activity similar customer to and we Turning continue forward. our see strong,

portfolio with in very We of our are rest the Bowen currently at village X at of occupancy our healthy Basin own villages, full Australia.

continue to relates of business, integrated expected our for services remainder margins it the are year. As the improved our to

on by plan. We date, focus are our to our encouraged to progress inflation continuing we mitigation and are

We our potential a our XXX integrated are has line focus we business We winning work to to excited business, strides XXXX. of mitigation about our Western growing shift team on integrated and of million business. growth and inflation can services goal services our top AUD made have now our plan. the Australian Again, to set by grow

elements I our will strategy. of underscoring conclude the key by

capital hospitality to prudently and prioritize, our safety in will continue and offerings. invest our to generation, growth We'll shareholders innovation our evaluate well-being while guests, operational and the to maximize we communities. enhance free We will flow we to and And capital as return of best-in-class allocate continue employees always, improvements opportunities. cash to

we're questions. that, happy your to With take

Operator

first Scheibelhoffer Our line the Instructions] Stifel. question Alec of [Operator comes from with

Alec John Scheibelhoffer

from So two me. just kick us to here, off

looking normal expect can XQ, should the XX% full EBITDA between of with roughly the and about of Just the drivers to at so we were just end? full guidance, also, some year in And high about when the XQ? talk we see low seasonality year you

Bradley Dodson

and does QX year. which like. Seasonality in largely it you. Thank in looks of coming month of the again linked Right to should to the EBITDA expected. same the this part obviously answer second by the yes. into Canada, look upper season to that QX the and and be now, turnaround what Canadian turnaround continue only We're issue, question, it. end end The driven is the as the lower season is X actually case expect The amount we the is

out. how So us. we'll driver see That's for probably it the plays biggest

impactful on as Most costs of largely food to Inflation using negative globe. right be temporary more our costs has has team now increase the job across productivity. in issue, trying continues full-time and which The impact labor a and, great around a to Australia an importantly, improve, opposed done in labor. terms to labor,

the those So the issue. of largest are primarily drivers

just against Killdeer, Sitka really our side strong the us for And in Australian execution seen few really core very had gone services villages. but occupancy integrated area, Australia. has a better year-to-date. clearly, on in in Lodge. this, things occupancy Basin in occupancy had go coupled Currency We've good Bowen we've Canadian We've with better the

Alec John Scheibelhoffer

you then of the question, at just second think Got just potential it. if when about Appreciate are What M&A? was your criteria I curious looking flesh out And could key just a uses how color. you you're as cash.

Barclay Brewer

we've better to cash, those back be the shares $X we growth size of $X.XX returns the well. buying as uses The But a to business. is back or That year been shareholders. paramount. stock. share dividend, Well, full back which the opportunity and And need buying got -- to for up growing we've have for opportunities get for than the is opportunistically

lodge organic Canada are in and of opportunities. the is around opportunities handful of them The rooms. billed M&A. and side a rooms, or And and we're And within either modest expansion geographies online looking contracted increase organic there So are bringing M&A Australia. services around then back integrated at

Operator

of Steve with next Ferazani line Our from question Sidoti. comes the

Steve Ferazani

about another impressive revenue. and to I of ask wanted terms Australia, in accommodations quarter really food

Or new You more contracts -- near Have it had there does all this seen contracts term? so better this growth? renewed now? at is announced many we Is rates. level off or near-term

Bradley Dodson

years The good is particularly we'll a business if X lines this and for services XX, I ago the year that has really local No, the business year, team further a budget we resoundingly. you there. see recall, growth, a integrated in I'm water on going mean building to did beat million X X currency. of Last $XX XX, and side. that lot back was was business talking

that's guidance. So -- and factored into

others, And competition from more of a on that. we're It's we're in market good optimistic that strides terms share service than so there. differentiated winning we're cautiously the so making

Steve Ferazani

number kind in of of we renewed Great. What are derisked what's now? the should term the risks given concerned sort have there already? near place right you you of Or do have be about? in contracts term you've that Anything what

Bradley Dodson

-- the the as questions said, can contracts on in services about That the integrated are know, you be the no XXXX. are material renewals there Australian no all business, There -- integrated being services, until canceled.

a team every and We've got day, conversation, there's there there. -- customers the you're good relationship we we -- serve of people reserves. to every But and where that carries up to mistakes. with trying service show day, the be So they're to deliver to good and day, is going And the the willingness the major the where be when to conversation, effort excellent have day. the to deliver with a transparency inevitably transparency

So.

Steve Ferazani

Fair enough.

significant fairly in of And but the growth where going side. was can that's given the there, -- driving what's your revenue than on else Canada, little line other Canada. give to up pretty quarters service X year-over-year Turning I that? margins in everything straight it's food are XX%. On and a know thin sense given you more top

Bradley Dodson

Canada discussed. we the I as sold one, major mean, McClelland Well, for the asset. driver are

We've the and both top value we're losing line wind-down for Those the a those year-over-year, So LNG activity, that EBITDA. Canada, billed sold. right? the assets were the got second in drivers we major And rooms. Canada good for is

Canada. for is projects additional is of the find our to us to build the up focus for Now back and team profitability

batteries. effectively, used a transmission think McClelland, A mining are are I through both there permanent assets EV mobile, industrial we that in process that assets remote. lot power recognize projects of that by modular are the need are of that lot and and selling them driven and, of resources our

diligently down And very and the so to working east Canadian other specifically of into geographies, the expand business U.S. Alberta into we're

Steve Ferazani

that where And Lake, is McClelland follow-up? any QX? are update within completed on transportation contract on And you any

Bradley Dodson

and client. complete, quarter. U.S. location was in operate is Western contract pursue those new of the term assets to for we those long reinstallation are potential continuing the it first recognized the transportation and new The the all in Right. assets the at to And the

Operator

Dave comes Storms the from of line question next Our with Stonegate.

David Joseph Storms

of we you've now. with couple kind so quarters Just I know dividend. it a paying for the start been of

up gone has paying stock started since Your you it.

Just do revisit of front how often competitive. that helpful. Anything process be could it that to sense make is remains you give a you your sure what on like, us would very

Bradley Dodson

key like to we'd And year fourth get underneath belt. be the readdress Well, the fall. so capital framework. again, Sure. our payment, in it's would a our we'll This a to it component allocation

us EBITDA that of in in as you And covered is the year. question. But is first seasonal, seasonal. so, cash know, we cash is for the also flow flow better half the back

So but Certainly, we'd this like of how play out. a back the to see we'll dividend year. growth that is one in half things possibility, address

David Joseph Storms

levers touching helpful. recoup of of kind And that Very Understood. you those just back some kind mobile on to of your of losses. some then camp have

hurdles And a Alberta, into that expand to of little some maybe over the mentioned be would bit. U.S. the like You look logistically? maybe What to would what that? get

Bradley Dodson

the need is, not we one, forward. project Well, They're right Which are twofold. the client move hurdles now, surprising. to

development the projects team that's We've happen. So light handful to projects got needs pursuing. business we and assets. side the related dependent and work The is on that initially get largely pursuing going related. they're are Canada mining the ultimately But what on we're need Eastern actively we win to of in a to can and work. U.S. to green we got We've transmission then on be a need McClelland more simply opportunities,

Operator

with the turn that, back the We I question-and-answer comments. to would Bradley Dodson of have closing reached any over session. floor to end our for And like

Bradley Dodson

We in forward planned Thank our look you the speaking so much, and for for Civeo, July. appreciate on quarter call and joining interest to earnings to everyone, your call second thank today. you you, we

Operator

teleconference. today's concludes This

this participation. time. lines at your your disconnect you for Thank may You

Civeo (CVEO) 26 Apr 242024 Q1 Earnings call transcript