CVEO - Earnings call transcript Q2 2024

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Operator

Ladies and gentlemen, good morning, and welcome to the Civeo Corporation Second Quarter 2024 Earnings Conference 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. Please go ahead.

Regan Nielsen

Thank you. And welcome to Civeo's second quarter 2024 earnings conference call. Today, our call will be led by Bradley Dodson, Civeo's President and Chief Executive Officer; and Barclay Brewer, Civeo's Interim Chief Financial Officer and Treasurer.

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

Bradley Dodson

us our quarter today thank call. I'll underlying second summary and results. to -- you I'll give XXXX joining Barclay call the that provide seen our today quarter that growth quarter have key all Regan, demonstrate Australian questions. Key guidance performance. comments a second our in year you, earnings full and will can Then on conclude be prepared for we assumptions. updated a start we'll takeaways Thank second are, XXXX on comments and brief some results and call regional for our with open the financial and our company on review, And initiatives our our the takeaways of from second then for the quarter segment-level position the undertaken

customer as our Australian to at business our build villages rooms mobile activity year-over-year. and services we $X.X Our activity, improved the own XXXX expand by adjusted EBITDA LNG relatively experienced which second in integrated EBITDA free expected strength we EBITDA second flat by decreased adjusted continued million headwind cash due increased XX% XXXX compared camp and year-over-year quarter in Canadian to from despite revenues our of flow the relationships. with adjusted on that our existing quarter increased

into was forward some XXXX Our stronger due third second the for turnaround to we quarter pull quarter quarter XXXX. customer activity of of the the of than Canadian expected from the performance segment

repurchases share dividend quarter XXXX. shareholders capital during through of our returned and also to $XX.X million of the We quarterly second

execute year we discuss business and and later a segment our our full in X the grow goal update adjusted stated I'll and Australian XXXX, a will the Integrated to to team Villages take our for well Integrated revenues across maintain that quarter, previously Australian We EBITDA growth our continues million AUD segments. by provide moment comments. We performed Lastly, to revenue brief business the in the on CapEx Own Services our guidance during and to experienced prepared year-over-year Services business. both XXXX. XXX

the an down XXXX. wind business year-over-year as impact Services the well relationship. EBITDA second wins the activity our the expansion Integrated of as In revenues mobile activity, of expansion, expected, LNG-related Our and camp growth adjusted Canadian of particularly due to due to specifically in segment decreased quarter recent strong as competitive of was existing customer Canada, the

results Canadian I'll review than for timing quarter in initially again stronger activity that, shift it Barclay second were with comments. actually the and of the some we of level Sands region. And Our expected Oil to segment the financial due over turn to turnaround

Barclay Brewer

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

$XX.X quarter, $XX.X operating million. EBITDA generated flow we million, cash free of second the adjusted cash During $XX.X of flow and of million

Lodges, million by LNG-related including Canadian costs. decreased partially of wind-down $X.X due by the Services Australian increased adjusted EBITDA year-over-year offset adjusted to camp mobile activity camp Integrated Australian and Own quarter million business, in year-over-year, mobile Villages $X.X EBITDA increased activity, demobilization Second at our Canadian which expected

its performance of second begin with in our a XXXX. for the the [Indiscernible] the quarter now compared to to turn ago X Let's second performance I'll segment results year quarter segments.

our second in in the billed were The and the and $XXX.X This segment from this increased escalation own from steady which million is awards. $XX, revenues year. in existing second our million, wins growth in revenues customer Adjusted demand to to were was demonstrated up rooms for segment. activity. increase our due increased and contract. Australian XX% villages in EBITDA quarter to the due from at of last by $XX.X in of well dollars XXXX. Second our The services continued room up from XXXX was up expansion $XX.X quarter daily villages EBITDA build our million quarter the was own our of million, $XX.X as as adjusted in shows range client second rooms, XXXX. activity to as and the due This to relating of U.S. villages increased recent the XXX,XXX increased X% competitive Australian XXX,XXX quarter integrated Australian own recent recent contract CPI $XX rate the quarter from

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

of activity During This to both the periods lodges the the $X.X XXXX a XXX,XXX, in villages. McClelland primarily for second in of due at and from during decreased the despite lodges. On into select increase room basis, capital were segment daily dollars occupancy expenditures the contracted mix Canadian and of incentives lodges shift between XXXX consolidated of quarter the compared to our for for lodge. rate in activity the the increased quarter quarter was from XXXX. was of quarter of second second our Lake related the rate turnaround driven Lodges XXXX. quarter customer during predominantly quarter, which The U.S. in in up $XX, million spending Canadian to the second second period $X.X was from occupancy the the Capital to on quarter a third sale of of which stronger XXXX in related rooms maintenance were billed totaled XXXX, expenditures million $XXX XXX,XXX same by

into $XX.X was June a March on debt decrease million million, $XX.X XXXX, XXXX. net XX, XX, Our

net the for X.Xx decreased quarter of XXXX. Our to XX, ratio as June leverage

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

our for for repurchased Turning approximately a previously repurchase XXXX, share allocation. program with the In through million. shares of approximately to quarter capital XXXX second goals total our in we've of stated line XXX,XXX X.X

we XX, dividend quarterly dividend to has that per quarter, the payment. the total September payable million. $X.XX to XXXX. million repurchases on for quarterly of turn of XX.X need in share to our shareholders announced capital through shareholders and capital full a of that, a declared share Directors recorded guidance we mentioned, This Bradley it As or record Shareholders as the our dividend Board XX.X receive return of discuss to morning, over Bradley cash Bradley? August I'll will of XXXX, XXXX. With year XX, year-to-date to

Bradley Dodson

and for year our each talk a of X you, regions. XXXX basis consolidated Thank on now into outlook look guidance full the about the Barclay. I'll

EBITDA. XXXX of million to year and to full $XXX revenue million for revenues $XXX -- guidance for revenue and million our $XX $XX maintaining are adjusted adjusted We EBITDA ranges million

EBITDA million related $XX to maintaining lodge CapEx guidance of of inflow with million. Based year expenditure expense capital about $X totaled adjusted for guidance, $XX XXXX net sale, the $X cash the McClelland of year dismantlement million. million We Expected $XX our full and these year Lake are and full the to on capital first working cash and the coupled proceeds interest in taxes million year. of quarter. $XX for million Expected Australian full full expected which

$XX I thank responders including safety safety to our employees assets. operating at impacting the regional cash and around outlooks the like this or $XX that staying first our million. I'll our flow corresponding expectation want our Western Canada, acknowledge who We XXXX to now assumptions. and the million In aspires been working ensure are to the clock have are Canada, of of our maintaining guests, region. free to the underlying I'd provide of Canadian

positive McMurray the our operations situation this quarter of fires. days, few earlier, will is we do the situation, a financial vigilant occupancy expected anticipate was our not season. Prior shifting over current quarter. balance fire throughout we to Canada, to fluid stronger discussed as has remain negative significantly planned last in improved second Fort than the due customer second in Wildfire turnaround but any quarter, impact or material the the While quarter around third and we currently from

The expect we're for We rental Canadian in forecast activity. demobilization to results into line full activity expect with the on due mobile year. Starting majority overall, the complete, camps. what process. of largely in and is that Canada mobile continuing more this latter we is year our around our modest half But come camp shift to

third adjusted our earning We expect the third final $X.X approximately demobilization to be in the quarter, EBITDA costs. quarter for demob million the by completed

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

we Turning to continue at strong, that in loan and moving remains expect Australia. villages levels very activity forward. to Customer similar our

currently of Australia. the Basin Bowen portfolio X at and villages are full in through the of We X balance very our occupancy healthy

are to business, expanding wins contract existing Services it recent the relationships. to well Integrated we demand As as continuing from our customer experience as relates increased

Western excited growth integrated have in in we're and to We potential recent growth see Australia substantial that in years business. the for business, continued services further about

AUD in our strides mitigation set we to Integrated ship our winning inflation to growing has our growing team can that back Business repeat, Australian to the have plan, Now by made goals, Again, work business. XXXX. we now and Services million XXX of

up stepping to seamlessly transition all and past role efforts few wrap Thank Financial like your for you the Before our I'd the comments, for thank Officer for this Interim over I period. months. working prepared Barclay into

Accounting with the positions forward. Canadian May Collin and has development look into Xst, various role since forward this previously serve will role. our new his with moving Gerry on across new been new development of corporate in the operations CFO As announced, as I working at our business transition -- Officer as and teams. XXXX, executive to Chief and Civeo August them serving into Barclay will Collin

closing, year. With we and our take strategic So laid on we're continue demonstrating progress that, as execute we have and our previously to solid operationally are on these out happy growth in this results initiatives questions. to initiatives

Operator

comes Our Instructions] with [Operator Stephen first Gengaro the Stifel. from line question of

Stephen Gengaro

new Congrats, role. the Collin on

for things of a So probably. couple me, I think

what to as what And First, about of from most can a little attention far we bit 'XX, in of you to a you're growth right Australia paying should half perspective seeing of the now? be in Australia back kind talk kind 'XX? as potential

Bradley Dodson

Absolutely.

generally But terms through see we'll in always, the a Australia, expecting in I fourth holiday our own the half the villages of back speaking, occupancy relatively in the consistent remain Australia downtick then year. third slight of villages quarter year to remain in with as occupancy And downtimes. expect In own the occupancy consistent our in throughout fairly quarter. in

with Integrated the pleased Services been pleased of side, On we've team. very I've the the execution operational -- been very

that can the is that the and the You year. in the through continue expectation see margins the business, Integrated of balance Services of will

terms line fairly saw Integrated QX top in in in And remain QX You perspective then of and Integrated business, I a to QX performance line big the top XXXX. to a consistent from through QX. uptick Services in Services expect

the for winning that transitions additional business kind then So to attention work. of

all had $XXX team tangible believe prospects achieving and top pathway moving million on. to working that. is XXXX And this a the several of by towards goal that our line there's again, So we're

We magnitude I Bowen for continue. expect the a own the on convincing And we two, on and lines. Basin. add the and a One, our get order of little selective capacity customer things. so That's they're the of potentially we the couple to get opportunities process. see twofold the to trends permitting business of to support by rooms look as Australia, really villages, the to we the through maybe to bit commitments of And operations, looking enhance XXXX existing investment; into XXX

in business So In Services in -- Steve. that can go year hopefully, half the Integrated second up sorry, get and the XXXX. we us ahead, teed benefit of this

Stephen Gengaro

Oh, go ahead. Please, no.

Bradley Dodson

the got work. what the to in win then additional doing. go business, Integrated continued out and Services is team there We've it's And

And ourselves so it's established we've the think them. Tier what's job next. a for Australia, in think there, X we done customers I hospitality own the great I and assets, has where just as a operator now team and the provide services

and so And now, see handful right those we'll on working of how out. to have a play we're opportunities

Stephen Gengaro

is And down question Great. other big leverage the your really was again.

Your strong. cash really flow is

also, from you could be mind, over just about should other perspective. worse how back we or do or is X, of think obviously a looking You're M&A landscape least, kind of thinking the Canada, about it the sort term But about financial geographically? how or I potential, kind of your buying what of Australia X, stock. sort think the But think the we mean, for X better should at in what when you're about next than quarters? happen we

Bradley Dodson

Sure.

start So with Australia. I'll

acquire On our third villages opportunities side, to be are that portfolio augment additional that to additive portfolio. and parties, the own would by handful villages of are would there owned our a

So looking opportunities there. handful In to Integrated did business, we're with would Services at the the Action acquisition. a similar of be what it we

infrastructure support top will to position We currently effectively see starting of a day. be the serve. back get efficiencies some build that in having off a in building is serving in people that and be that some starting or XX,XXX don't on to over based end line where buying what critical overall market overall business geography a And terms to office of the we market we the mass volumes, the we're

And Oil for the so there's growth steady, that's Australia. really In not ton or Western of Sands business, in the that remains our but market. Canadian Canada, a focus base very

So across America and capabilities broader North our our leverage markets and our geographies projects, group both assets in with a industrial and serve asset model. of we're looking current delivery service to to

us their the to really McClelland opened the our installing past, where customers of combinations. competency. about heard them, process core competency owning marketing for talk in core it's not them, of assets up the eyes the them modular our of running value And You've it

growth in the there some XX see opportunities next we'll optimistic cautiously months. So

Operator

Our next of Company. Sidoti line from with & is the Ferazani question Steve

Steve Ferazani

strength XQ rooms. in the The on billed Canadian

a you couple indicated was think so forward clear I of there X. pull times, from a X,

billed which to might how season I general healthy. figure up trying year ago, out turnaround very very, how you've Considering is was even extremely a was this year mean to I'm also were in be it sold rooms compared your lopsided playing turnaround or Lake. strong. though So McClelland season

Bradley Dodson

Yes.

couple of a things there. So

Second 'XX, benefit full quarter quarter of or that the second 'XX of we in 'XX, McClelland, XXXX. of of second July quarter had of in -- that we sold dismantled the

assets work So of replacement historically the in there. the having The this last the quarter McClelland getting to is in of kind process is is customer commissioned. clean of putting

locations in from other So the had Fort benefit overflow we some second the quarter. Hills into project Civeo

of full half in the impact sale So the of we'll see McClelland back of the XXXX.

frankly, XXXX playing we In terms expected in basis. with of what out turnaround on generally activity. year Quite full is a line

general, Some probably a nights QX year up shifted of the activity overall timing, as is on we from indicated, turnaround basis. XXXX from XXX,XXX room to QX, about XXXX but in in full

playing has it's QX just timing and between expected, we out shifted. as QX So

slipping got with be the half coupled million of quarter. first costs second all And expected XXXX. had $X.X about demob that we to the in So in the specifically mentioned, we've we as into half, the completed third

full forward. the for expectations pulling turnaround quarter Canada, expecting costs our a and what for will to be we've in back flat from net-net, year We've demob and some second got back stronger got with pushed up but we're half to sure. softer being activity So the line

Steve Ferazani

revenue to down go helpful. now will end the Fair fair it's in guidance and say for to of given you consider were unless changed to -- XQ the if enough, XQ from Even that your side. something your higher have right I the your that gets guidance sort on range would outlook of Canada, Australia, be

Bradley Dodson

Well, could I major major X would say the range. -- that there probably kind factors breadth the factors of influence are of guidance X that

been bit. it's every better. weekend, year. positive Western XX/X over HRTs. could fire and takeaway negative would X the the we And didn't is think think I most Canada, over it That's all Alberta operations, don't significant, a for rain while getting the overall, little guidance while why been the broadly this time or the last tighten around a intensity we particularly there's range typically and safety weeks we effort swing impact, which in do material With a foremost, speaking, that has some and has important more First

it So while X could or it's we million, direction. don't think X material, million either things swing

part it. was that of So

the upper I don't -- I baked. a us Australia And fully full end would they're that and the the I likewise, us the say don't demob in performance margin move -- could your of to occupancy the question, -- say, I move be end we timing, can occupancy upper would CIS that's guidance. just range. of But upside. Secondly, costs to of could in range. to see see to don't year guidance matter impacting

that So I X end the or we think up influence factors kind where the overall, range. those are of X on would

Steve Ferazani

Do on get were the contracts well here? Anything to yet. and lot labor one costs? you you up with you room? in margins. above see these move more a some kind have Are Could revenue seeing in? any moving where helpful. reduction comfortable Australian in you thinking. of can new we you margins just not do came margins upgraded Are bit really what a you That's Obviously, Margins

Bradley Dodson

margins comfortable have been with come in. where I've

of basis the the own We cheap at integrated these services. villages are kind a running -- really they're on inputs, right, and contribution own

full. some On gotten villages the the clearly overall situation to given an Overall, is Bowen Basin say upward the but Basin side, We in running Bowen own overall own haven't improvements. has of on in has good. made occupancy locations that and -- strong. the We're say X bias. pretty pre-COVID our efficiencies, we've has still the pricing village's full is X I'd I been performance margin would labor

see would is how execution. and Services, that In and volume we'll So steady, say of it's issue an pricing Integrated that plays I out.

Operator

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

David Joseph Storms

color of us incentives, and the prepared you year? hoping rates bit more a of the if in maybe the the could was of duration the room incentives. on in that back Canadian might a in the little heard suppressors one prices I we the was Canadian see a give thought rebound of remarks had I little half I of

Bradley Dodson

Yes.

the will So in Canada pricing. contracts most of have tiered

there volume And up, lower so are prices. as goes

So and -- better prices it will lower actually -- off just net-net, we're with be higher volumes. you

a It So was net-net, better situation. is this turnaround related.

as we a It's year, pricing. really the net-net, and So contracted. all just the off some But volumes pricing always we volumes better discounted the want we've structure prices turnaround in see will we're half had. second up. in decrease movement the It's go a start tiered volumes, pricing. not to It's of that

Regan Nielsen

And for Very just me. Understood. then X more helpful.

of way the like? of halfway guidance end and CapEx X/X year. about the low to give XQ look cadence Can might you the the on a of You're your what through already kind XQ for CapEx through and sense us

Bradley Dodson

on had allow XX. of about rough million end we in if CapEx the the of kind expect -- I forecasts the and the Yes, first and me we low you'll then quarter of XX-ish that be based X XX and range fourth in did numbers, in quarter. the between will third $XX is half

be Some it timing. of is going to

some then looking larger reactivating of our allow we the clients. that region I the love really and Basin. fall And the rooms like to spending Sands mentioned, some into will Bowen get serve to can spent. in those because to As of always things: commitments capture launch I'd on dependent at rooms permitting project That's some will Oil we're also to to clients place, commitments. If that customer we but have this year, XXX X we'd that all smaller add us that

off commitments to them McMurray Fort that get before we the kicked the those players village, Village. move to the season so winter that into the spend smaller like we'd and So from get can

Operator

Mitchell of next Daniel from line Energy the question comes Our Sean Partners. with

Unknown Analyst

the kind couple future minute take like years maybe, you years the of opportunities what a take Australia, of talked but Bradley, out maybe I to kind of a LNG? Stephen Cedar at next expansions call, about X on X for can know of could potentially minute to frame you beginning the LNG the supporting

Bradley Dodson

Great question.

opportunities the that handful projects additional there that Lodge. is LNG There'll for think of to coastline extent Sitka support business. So To our I mobile pieces work be our opportunities additional a for it. pipeline would camp are there for

to project getting return relative terms So activity But occupancy had close We've our for strong it LNG Canada to to would British Columbia the first in be is a very production. first operations. half at Sitka our a of nice expectations.

Sitka at activity our is down. winding So

comments, demob in prepared we As mobile We're just in camp point. mentioned at the the activity. this

saw Western in to pathways, for assets pathways would and So existing additional project LNG projects, mobile opportunities add forward. camp occupancy move if Canada present deployment. we

Operator

next question Stephen the Gengaro is Our line of from with Stifel.

Stephen Gengaro

takes What and I high-level don't we puts coastal entered kind think one. year some or of we're we of you when of to want But very are some think know like and there and one about Just work at are you about that things. takes not. 'XX, if kind understood other end with about we the when pipeline this the 'XX, 'XX? quick gasoline puts as talk

Bradley Dodson

comes be here. or much that on Well, that side, additional buying the say let's the investment own capital to capacity see how in or expanding Australia, Bowen billing it's I locations would Basin to of that's fruition. whether going activating villages, on

here new quarterly some the will of there'll In contract. through I on Canada, from takes. 'XX, basis As winning really to finding and we've on in mentioned, question, 'XX won ago, earlier pricing In comments, puts 'XX. think own to quarter we think the to in potentially now, that And your to be our you months and as win, of about depending of to winning kind Service, going or balance some. right we out contract. some as wanted in a and awkward going saw be the CIS, it's plus 'XX, be there's -- flow it kind expect XQ on on villages. Integrated to set flat In first integrated the work. be I whole be I Australian But opportunities through it's Stephen, next We've the services mentioned XX the bias I

net-net, Oil major headwinds in of any occupancy, Canada, have half occupancy business Sands in would always versus in on But first to the first As of will at terms kind region. 'XX base for some I of in additional any don't it of strategic of changes 'XX depend -- without 'XX. terms Canadian level We Sitka. half wins expect the flat We'll to comparables 'XX in a activity. see turnaround

Stephen Gengaro

this gas Canada. follow-up, opportunity is of We've LNG talked Great. the And quick that bit, in and past then What's for the around. X a that status source as that is have still on the there far on combinations? good And stands. there that where involvement side? your -- be don't could kind just a the about Or I as of a shift update

Bradley Dodson

I source would basis. gas it our entry into Unlikely, move an say or side, the we on an on organic acquisition. would require greenfield

Operator

Ladies closing our and the session. Dodson to now comments. over his concludes question-and-answer this would for gentlemen, I hand Bradley conference

Bradley Dodson

Thank call call, to October. joining and you, on your in Civeo, you happen and appreciate which we expect late you, speaking for forward everyone, to third our to Ryan, we interest Really look earnings thank quarter today. the in

Operator

participation. conference concluded. has The your of Thank you Civeo for now Corporation

lines. You may your disconnect now

Civeo (CVEO) 30 Jul 242024 Q2 Earnings call transcript