HLX - Earnings call transcript Q4 2019 | Helix Energy Solutions Group, Inc.

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Operator

Greetings and welcome to the Fourth Quarter 2019 Earnings Conference Call.

During today’s presentation, all participant lines will remain in a listen-only mode. Afterwards, we will conduct a question-and-answer session with instructions to follow. [Operator Instructions] Please note, this conference is being recorded, Tuesday, February 25, 2020.

It is now with pleasure that I turn today's conference over to Mr. CFO. Staffeldt, Erik sir. ahead, Please go

Erik Staffeldt

morning Good Counsel; morning, our full us on Ken call for XXXX Scotty our Sparks, our myself. And call for thanks COO; this the conference on and our release. joining Owen our Kratz, earnings CEO; General today Neikirk, Participating everyone. are; and fourth year quarter

night. press related slide the you've an Hopefully, and had opportunity release to released review last our presentation

through the you not accessed both a can at of website copy materials, page do these Investors www.helixesg.com. If have our on be

The Releases press on presentation accessed the release can be clicking accessed can tab, under Press today's by slide and icon. webcast the be

Before regarding we Ken? Ken Neikirk our remarks, forward-looking will make information. prepared a statement begin

Ken Neikirk

based call under current this Harbor facts on statements the in conference of in than and or All are our made the Act of certain this During we statements anticipate expectations. conference call, associated forward-looking XXXX. statements historical making Private statements Reform Safe presentation the are Securities other Litigation of forward-looking projections provisions and

recently Form may future our SEC. in number a Annual filings and projections statements forward-looking factors actual from our our on in with differ to Our variety and most two those Report set due of slide XX-K including forth and and materially the filed other results

to slide during at Investors section of reconciliations for call, our -- measures provides the financial of GAAP broadcast our under release, annual website final with are presentation -- along our report financial and non-GAAP with this this www.helixesg.com. certain a rules, disclosures non-GAAP replay the presentation, SEC press earnings may the Owen? of available of measures. Also the this comparable accordance be made. These In reconciliations certain

Owen Kratz

Good everyone. morning,

starts quarter provide Robotics North Well start activity the into runs through typically Now the marked in in of The April. results. on a start Sea fourth The slide segments. which our Intervention affecting five we're summary and the November of slowdown of and going seasonal our high-level slowdown today, eight to both

million be million $XXX decreased as in in or The can $XXX to QX. or down from our $XX QX were profit QX. revenue compared in XX% seasonality results million million $XX to in The XX% seen our gross revenues in decline

we net $XX the in reduction million in QX. QX. QX compared compared million income For resulted EBITDA million in a of net income recorded to of in $X million revenue quarter, in $XX lower to of $XX The

managing during Considering reducing slowdown, periods. quarter teams high operated quickly the seasonal the utilization the efficiently costs our and during fourth idle asset

million. For XXXX, revenues $XXX to improved by million $XX

to improved by million. gross Net from to by in into our XXXX million million increased $XX $XXX $XX Our And profit EBITDA income to $XXX million million $XX increased XXXX. million. $XXX

in year for growth Operating cash EBITDA. $XXX cash sequential marks flow the of This of million, free million. the and $XX third year was consecutive revenue in flow resulting

in the factors many execution our our efficient I were for and with a that employees industry. of starts XXXX. and There financial level us in their customers our leader employees. operations as operational thank established and high improvements drove efforts safe has all for XXXX. Executing in It our

prices an Second, with XXXX times, consistent well activity we signs see challenging market. relatively recognize predictable intervention we're these and North been since region of improving are stable to has starting our Sea but The oil markets. offshore driving

driving customers our We're with financial seeing returns, benefit signs investment of leading immediate decisions, back In offshore. of saw rational to vessel activity Mexico, the our offshore Gulf increased XXXX utilization.

gaps Droshky last, benefited the benefited the downside. creative Robotics Third, from during the to flexibility we've And in scheduled our us limiting our improving cost work we allowed that from contracting structure schedule segment.

positive conditions positioning returns. the us to business the for right-sized We market generate have current

cash associated perspective, $XXX with million LC. million was level an in end the our additional From $XX cash a year restricted balance short-term sheet at with

million operating million. $XXX with generated million of net of flow invested we $XX capital cash, $XXX free XXXX, in cash expenditures For

the debt net million. $XXX at of year was the end Our

call over an of turn for now I'll to in-depth Scotty the discussion our operating.

Scott Sparks

Thanks morning, Owen. everyone. Good

Moving good revenue BP we considering of on efficiency, seasonal the and completed campaign the winter and contracted the results base. regards this against slower across performance end with year's excellent quarter QX. well safety, to fleet period achieved period fourth commenced was XX% at slide of uptime a in XX, the good operational uptime work We to achieving

to safety by strong far performance years safety with of regards ended best one our Year in statistics.

of performance team's this our Helix year. We proud are

as staff our been have Our outstanding. and such Schlumberger partners

quarter. resulting million In from the profit million $XXX fourth profits quarter, and QX. XX% the XX% margin $XX million third Gross to in compared decreasing $XX of gross in in achieved we was $XXX profits revenues of million,

globally. winter we XX% period, had Well XX% Considering XX%, utilization. fleets of vessel the at fleet of achieved high of XX% seasonal achieved The chartered Mexico of Gulf Intervention utilization. levels The had Sea globally, XX%, Brazil utilization of obtained the start and Robotics North utilization

second of completed late to regulatory of in and four wells our abandonment work prior five-year QXXXX the completed maintenance customers well then December. two Gulf Mexico the its program for the of In inspection and commencing trustee

worked for customer, for enhancement number customers production one scopes for two then QXXXX a of scopes completing and another. two abandonment

most seasonal Seawell business the through entering to in December, December Brazil North high of Performance working Sea excellent was stacked. utilization end achieving strong for very uptime. well, both The warm the into the and before XX%, with four well working quarter, vessels with well, performed enhancer of in the again customers, of performed work working

active support trenching working utilization. The completing fleet of very works, renewable Robotics' and XXX days was between chartered ROV

charter of Canyon, expiration Our Grand cost base is of reduced the now in mid-November. the further the with

completed excited expanding well to lines first completed on January, transit our to Africa going in the QXXXX continued and has and products already geographically. about West successfully. service We be

revenues compared Gross profit million financial Our profit. XX% year-over-year. gross resulting of XX%, margin $XXX from in performance We've increased in increased million XXXX. increased to million, to $XXX $XXX

fleet. across million. wells was work flow from Cash operating the $XXX activities completed XXXX, we XX Throughout on

and XX% spec We work of XX% activity, a type have production activity. enhancement of abandonment

of production work a XX% provides approximately the business Mexico. forecasted operations XXXX, enhancement to for increases Intervention XX Slide Well detailed activity. into Gulf our more of our review in Going our

completed And QXXXX of then five-year second of two abandon intervention maintenance Helix. two-thirds work the at Droshky inspection for its commencing, performed and the to and period. clients prior well The

and in maintenance to period second jointly-owned remobilized has the now now that is The successfully and in Subsea currently vessel quarter. back completed IRS maintenance to inspection the city XXK one expected is The to is undergoing work. early, the a be program QXXXX and Helix

XX% performed production campaign, a commencing well enhancement QXXXX good utilization The of client, another client. QX. achieved one vessel in prior multi-well of scopes The abandonment two completing for

very for day working quarter, with conditions, well the commercial downtime. the only combined ultra-deepwater one of performed Both units of Q

to vessels working on Well the Intervention slide good winter business harsher with year. Moving both performed XX, of time well the considering utilization, period achieving our Sea North in

The works, production achieved utilization next pathway scope diving for client Well Enhancer try client. XX% enhancement to a undertaking for seven wells working a on performing on the

XX% operational achieved and December against and Seawell vessel seasonal utilization scopes with uptime two stacked contracted an warm production scope, days. its The clients, for maintenance working In XXX% working abandonment two period. on enhancement the commenced

inspections West campaign. successfully prior in commence services early with equipment January. completing and testing the was and on regulatory fully first final to January went passage to then mobilized vessel arriving Nigeria client the Africa of XX The the completed long in and After QXXXX well

on quarter to work enhancement performance to extremely go in efficiency, operational slide to a and well. our efficiently XX, numerous production undertake another excellence the for continue for continued continue safety, scopes, uptime completed both operations Petrobras on of mostly produced and XX Brazil vessels regarding Again year. Moving with strong to related wells

XXX% working utilization QX. fourth working wells production five four quarter, achieved wells achieved being well scopes five the The In the Helix Helix on performing XX% Siem enhancement enhancement and on for X works X production Siem abandonment. in one utilization wells,

produced Moving to our a for significantly Strong team slide for better performance Robotics Robotics grow our commercial Robotics internationally. review. good continues year operational and XX to well. results

In operated the on the region Candies quarter, Gulf Ross days vessels the Two projects fourth Sea, Mexico. the vessels. trenching in in works Grand mostly the Canyon XX North and including fleet the from utilization was in XX%, were chartered APAC vessels utilized II of spot

Canyon ended the and projects combined own North base. Grand return its cost to The a utilization trenching hard on charter being ground our into XXX% in November the reducing Sea worked in further vessel achieving soft

XXX% had work minimal The III performing Grand works II work utilization North ROV utilization Grand support on is four had a utilization in clients. Candies support for Canyon in trenching. Sea APAC XX region. Ross Canyon the in ROV days days the projects in XX at

offering we from Sea, our smaller North long-term wind the also spot renewables survey site chartered project clearance commenced and and farm expanded vessels. In two the

utilization detail leave to in the vessels XX, your I'll Over already for slide reference. slide in trenching this

balance for Erik to call our the turn now XXXX a sheet on and will outlook. discussion I

Erik Staffeldt

update and our This leave and outlines slide profile. key of this slide on move XX long-term XX. metrics, and net to debt your for Slide Thanks, Scotty. sheet provides debt as maturity balance on principal year-end. reference levels their an debt I'll instruments including slide

in increased shipyard attributable of final QX in delivery during $XX payment is net primarily the million debt Our the net QX QX. The million from $XXX debt $XXX in the million increase to for QXXXX.

of capital generated partially from of by total $XX million operations. investments offset cash $XX Our million

at cash. position million end was excluding year Our million, restricted of $XXX cash $XX

net was end capitalization debt-to-book year Our X%.

for slide XXXX Moving on over XX to outlook. discussion our a

in -- in guidance our For metrics revenues financial forecasting certain key $XXX million, of in $XXX EBITDA $XXX providing to $XXX to range a of million million. million from XXXX, $XXX million We're we're forecast. range the

We $XXX expect between to $XXX million. generate million free cash to flow

significant $XX cause provided. expenditures, primarily of some key our Any estimates. These spend key estimates the ranges variation fall in assumptions and outside to could million approximately assumptions and for these expect include capital capital. We results maintenance results

utilization We year are on first a good QXXXX. the assuming

and primarily pursue contract West West we Africa to vessel other regions. vessel to in into QX The is and currently the expect Africa. under in continue work opportunities We

XXXX North continued market level Intervention with Sea seasonal activity maintain consistent fluctuations. expect We of the a to Well

is The during its work scheduled in completed early and expected Well maintenance early March. completed has Seawell Enhancer in The its for commence QX regulatory March. QX work maintenance to with

have QX. We vessels good expect into utilization to both

regulatory to late vessel remainder spot Mexico. the working to April scheduled XXXX. in trigger is the shipyard prior entered to the Gulf through and currently The mid-February. QXXXX of Moving of with in The early of projects December a a market completed BP in the couple campaign -- its maintenance returning

March. maintenance currently QXXXX expected is vessel The in approximately is contract early XX back undergoing on days. regulatory The

XXXX activity increase in experienced the in Gulf Mexico to of in continue expect to We XXXX.

high vessels QX periods. QX excluding are and utilization the both maintenance for in the the QX forecasting We

is to of XX XX to approximately QX maintenance days period in downtime. Siem with up last expected to scheduled X anticipated execution Moving for Helix continue its to of high in expect in both with level Siem last and operations to completed period contract. on X a Brazil maintenance its vessels our we XXXX X performance Brazil, The with operations. days in impact Helix minimal to QX

to for In continue Robotics, chartered our costs in and vessel hedges. we expect cost to structure from benefit reductions

We pension expect the compared ROE impact renewable be be XXXX positive for market XXXX. modest market to to Robotics' The should to results. our a The challenged. remain net to softer,

likely considered performance is with Production be production negatively be lower from facilities should and again no positive periods. will impacted by expected Once operational in production Droshky; to the maintenance markedly year XXXX. HPX all be scheduled

P&A not in Droshky work guidance contemplated our work. have any We or XXXX, production enhancement

cause in Sea, outside performed well could our To fleet. our downtime. Any in provided. for intervention fall key our and would the the XXXX high U.K., Mexico with variation The would range Any all from of achieve range work these of operating our impact utilization be market spot the high North to QXXXX higher EBITDA results. utilization the significant of of assumptions provide spot would end the little Gulf

The impacted seasonal Sea. serve North the in we by factors be to markets will continue especially

during QXXXX. will results the QX In of impacts maintenance the XXXX by the addition and regulatory be our to and the on QX on seasonal QXXXX impacted QX

XX is maintenance days Forecast at and approximately of XX days respectively.

early scheduled return April. BP is its to QXXXX to in campaign The

flow and Siem anticipate second during marginally third have in year. In generation second we be we rebound Helix with our strong EBITDA periods maintenance expected the a and to positive. Therefore, QX weakest enhancer all the on our in addition contracted expect the work, X quarter of cash the Seawell half significant QX. quarter, well our Based

worked the XX, intervention expected Mexico into of slide to opportunities return in Gulf identified well to work the with has to in QX thereafter. QXXXX Moving market and early is the March

in market to its the IRS similar and BP has is working XXK QX quarter spot contract QXXXX again with XXXX. the The the till through program work in second mid-February to The in expected XXX-day from QX commencement. fourth quarter then from with utilization

scheduled to Enhancer In early the are Well with market both Sea to dock are and Well North in dry Intervention the vessels Seawell complete in targeted work March. QX regulatory

months. in winter operations. period approximately impact and the with X days during five to with The weakness days maintenance period completed Brazil, seasonal QX downtime. Helix for Siem In five the expected maintenance its X of XX continued XX to to anticipated its up expect -- We last is scheduled Siem minimal Helix to QX in days

Moving in Grand the cost is continued the cost rolling Robotics structure, expected Canyon in segment to QX to hedges slide improvements off return lower its XX, XXXX and from of to benefit due mid-year. the chartered

market, renewals vessels. Although, and we're expanding spot tension site our a clearance softer from long-term are we and smaller project survey a expecting commenced two wind offering chartered farm

to year $XX regulatory forecasted million of is Over maintenance. The approximately slide with this the capital at XX. for CapEx most for

year approximate debt for payments million. Our the scheduled $XXX

and leave flows cash We and for expect significant in free I'll reference. XX skip XXXX. your operating to strong continue slide it flow to benefit cash from

the Owen call to will At back comments. this turn closing I for time,

Owen Kratz

narrative an challenging bottom increases, of a We're still services significant awful given lot they rates, although, as up context. absorbed give needs to I'll our and rate a Thanks slowly. the Demand of is still be Erik. in moving before a oversupplied detail. are see still includes we bit but and broader The off try market. are

-- have we're coming lot we the which While leverage to of rates, over to a utilization, on will well we years. occur expect doing that

enter some challenging, see believed have but a a that hold will to meaningfully to for promise may that gradual for supply-demand have We time recovery. We XXXX. XXXX signs we stronger now continuing be long

waiting and we're However, back a not story. recovery sitting on

cash with debt. along manageable flow market, current want yield free investors capital discipline, this In

Our first capital into working to It's in priority Nigeria project QXXXX. now at QX. our complete legacy last the least was

a We're that last could potential XXXX. negotiating that yet, signed bringing after fill would that have be We and None up for complete. is right of of to keep is in we're work capital projects for of for could also in the timing identified XXXX. first Africa remainder but half that XXXX. potentially most talk major QXXXX last the that to vessel work of now the for And the the our contract of work seems market

capital forward, million North In maintenance year for about the seasonally $XX XXXX, our to QX the we've million expenditure Going per Sea. capital. anticipated primarily should $XX slow run in

its the take after advantage to maintenance XXX So, North we we vessels. days their period on Sea periods also QX. first Therefore, the elected the both took in of this the complete has on to BP QXXXX quarter. maintenance scheduled

contracted maintenance in and in the for periods QXXXX addition, also Siem the In we the Helix Brazil X QX.

to Well of minimal in of So, for sort all told, -- we we that's maintenance This scheduled but a five of remainder QX QX. up have has sort allowance of up a year. assets sets strong XXXX, also abnormal an very Intervention minimal. us, it And an it the sets seven atypical means XXXX make in in for it

-- management. net Our debt second debt With our -- in priority are debt is debt levels manageable. million $XXX

$XXX deferred forecasted to flows. cash the XXXX in focus in on flow to Our debt cash capital intend reduction. with our is million million manageable free structure We $XXX

discussion. is ways debt how need around company subject of manageable. view to if, XXXX, make visibility and that shareholders. in debt the end the net market zero improve drive a that to to ongoing when decision. We're remains is gain intent on of before to a that structure always structure But an value of towards our returning the achieve We to position we XXXX clear while exploring we're with Our

improve working for on deals without our model allow We've utilization. relying recovery. greater business certainty on on the market Droshky also been evolving to results type

should to now further Africa expand with of start for the QXXXX we're We're in work region. the and margins in discussions geographically, region. in rates. also in looking absence improving West even Asia-Pacific Creative offerings are that higher contracting expanding the in And

constantly vessels The work the but sector. Sea. future should also opportunities, our assessing right be We're what expand farm wind expanding of mentioned the of the are also we see ones. Scotty us offerings our can new scope the with And North in they offer we must in as

our market feel strategy, is enhance accretive leverage We'll position be bright cash flow. we that that and future we those at Our selective. our opportunities low and to look can free only are

that, back Erik. With the to turn call now I'll

Erik Staffeldt

we'll Operator, Thanks, time, Owen. take this at questions. any

Operator

first much. with Please our question. Instructions] Thank comes And from [Operator you, Vaishnav. proceed your of the Vaib question very line

Vaibhav Vaishnav

Hey talked for thank guys get good you zero my guess, I about by you Well, morning -- taking and the trying of to net end debt questions. going to XXXX.

-- to like $XXX XXXX like and converts, for given think trying Just think for XXXX? I XXXX plans what your scheduled are you of million debt about about have payments already XXXX

Erik Staffeldt

Okay.

in we lower. our So levels I general, are definitely that driving debt think

$XXX payments scheduled converts recognize talked We the there XXXX. that and those have about have out here we in XXXX. you XXXX million that We in

and I Based permanent that of would there. on our our out keep think current debt level current our market a to conditions be as semi-permanent or form performance, expectations

So, with and associated than balances our our likely intentions more instrument. in 'XX some type would be of in to our converts 'XX roll

Vaibhav Vaishnav

North that's the Okay, that you rate you're improvements you seeing Gulf Can Sea? in what in talk about Mexico? seeing are of And helpful. very

Scott Sparks

Yes, I'll Sea. in increase slight have the take we North definitely a seen that.

Our slightly were we legacy well. rates. But that utilizations of last at contracts a as improved year, couple lower had

the having any the own them our -- So, is of -- slight Gulf increases, quite the gaps Mexico, utilization we've And with North the market but fill that by with fair readjusted work. that up, droshky means Sea. again come the in very we to in bid can

still rigs. an oversupply to starting of So improvements. see rates There's

a not larger properly rates as in so, lower a at we've off. bit end as at for as achieve. XXXX rates our of could work well, drop the increase And wherein high of those was a up more lot undertaken, that Also, as us rates this see we'll rigs it's XXXX we our looking year contracts the in

the moving but slowly. an direction, seeing in right we're it's increase, So it's

Vaibhav Vaishnav

you the And a away. Okay. I have very good all cost job of most hedges the and hedges also going guess guys going on done like -- cuts

think, any trying you guys see there going forward? are opportunities if to that Just other cost-saving

Owen Kratz

I'll really you mentioned. Well, you the well we've take that while doing -- because for on been structural costs Scotty, that

there's operationally, there's on, downtime still our we're great improvement. think, There's I us. think improve for room more making I room on but allowances, gains which for to us still

personnel each partner there's stages allow I and areas on crewing our Also, We're to and in board think, early that are on of that. to train integrate the there would requirements manning vessels. strategic cross lower with -- Schlumberger of our us

would time that training reduction; cost just significant cost But be savings. all covered a will to affect that us it legal that place, But time to being a significant take some I'd aspects over see and get for the the vessels. on it in

Vaibhav Vaishnav

All all taking right. me. for my That’s again. for Thank questions you

Operator

question from proceed comes Our Please Macpherson. of your next with Ian question. the line

Ian Macpherson

good everyone. that Thanks. Good to morning, it's calendar the Owen, for filling QXXXX. hear is

And mentioned, working assume that tranche I would to out You work more bidding move you year into you multiple you're work. level as the of at year. of into missionary vessels pricing hope upon, that next a goes this you second are improve that

you I with moves this year get, perspective? next wanted QXXXX what year from from of you're pricing a the a with directional sense and regard that just, it confirm to as to for hoping into

Owen Kratz

go that to it anywhere first comes they that I Well, you to out. contribute year million. market the could from always to zero on and saying back, introduction EBITDA big $XX believe, the if uncertainty been QXXXX, It's a the the we've

And out being very rates introductory definitely will put in to And first I on probably get performing think, It's operationally, well. I continue. we're -- although, its well. order a that think, hopefully we've some it conservative, we started. taken

we in out the right able XXXX pricing rates we'll the or And Whether or is see. of rate the given, are the there's QXXXX. interest that QXXXX rates. in of introductory at we've we're to working we're that not, which are now the than a higher under. the achieve for lot But that fact forward, all at substantially and not beyond higher now, putting Going that pricing for

the the along We're in We're And in interest. of expressing Cs Ts negotiating the and I in know, don't far along we'll contracts. actually some far see. producers cases their

looking bright fairly the QXXXX. are So, for things

Ian Macpherson

that. renewals I your expectations a more on Good. real think also hear are Good. Thanks. than year to to about the up the now I from get in ask I right? front? shaping window mark four-year Good just a So there wanted in little your updated wanted Brazil, and the on SHX to when outlook that how looming you're hits

Owen Kratz

with The of informal. Yes. has QXXXX up formal contract. year for renewal. until The the But start termination next been very team the a the vessel want don't producers well. We're renewal discussions certain or the coming the be before discussions time to period will very working in

been through ecstatic about actually the value I think achieved that results BP about contract. where vessel. greater We're the with talking the have we is the relationship can very changing offer

positive. So, all the discussions are leaning

In Brazil, worry. have I less even

Brazil in of vessels been Petrobras. adding are Year last year rigs. the Marine Contractor top the two for two think I in consistently have We rated rigs. the They -- their were night last

it's extremely obvious vessels they I well. are vessels the think that the and need performing

wells XX to a do. at mean when year look a work you a pretty phenomenal comparison is could on what I rig in

brought So, story has improvement. efficiency into their the been

So, I'm confident Petrobras. negotiations with about the very

Ian Macpherson

Good stuff. I'll Thanks over. it pass Owen.

Operator

next question. proceed your question our line Please Narra. Praveen the of comes And from with

Praveen Narra

you of Ian's on it about a get you think for question I out guess I from are QX. who back-to-back follow-on for to and the you Or to expect Hey to years kind that it could the When wants morning vessel, the multiple if good customer? single it customers anybody work? guys. in do seeing interest

Owen Kratz

Brazil Mexico, now at we we're right also of and think region market. the Gulf of growing want Northeast, is that West We Brazil. in I running out We're actually to the availability. of have looking each vessels Africa, course, a penetrate two is and way Asia-Pacific, the QX

good think things rig As I the as for that soon us. market up, tightens spells

the We as QXXXX view right vessel swing sort now. our of

want I to strategically, to of the reason those we backlog have think build regions. in all

semisubmersible. built remember reasons have a we is, it we did being transiting one the transit a that QXXXX region-to-region. And of swing speed for the see does high it if I building, a you it's vessel way While the from

So, application that purpose perfectly. that allows us to

had The is producer lot in for built was one said that disappointment go I'll originally transparency they a in Sea. work vessel the the North though of for a

things the and the North the is three years later, it turned other actually than have greater Sea. As interest out the in in demand here regions greater is

that years, eventually. But from the will for I being next actually transiting I few come an asset more here think region-to-region. of see international

Praveen Narra

color. helpful super That's

Sorry.

Owen Kratz

More multi-client but not bouncing to around longer going XX, it's XX-day campaigns, be jobs. on

negotiations So for of now longer XXX to a have are type all XXX-day the we campaigns.

Praveen Narra

expect That's very helpful. And of between then structure as we some we guidance kind of and benefits profitability the of it's How have you Can moving should about and a then Robotics. think low of outlook talk And you there's as for Intervention you lot point. next the also about the years? couple be robotics up about -- trenching profitability can whether a cost year-over-year? the talk trenching well parts Well to you as obviously, Robotics

Erik Staffeldt

I'll that. take Yes

XXXX. higher to modestly Robotics expect in than we be So

the of are Canyon the structure, benefits been cost We returned. the gets seeing Grand has returned,

base. hedges cost of off come base. out comes that The have So the cost

goes when obviously have those renewables, trenchant We that. follows to of and timing flatter year, in out actually installations a are trend the our down to it it's some coming in tranche happen but of lower those the a manufacturing been cables seeing behind that

gas Higher bid season volumes XXXX we're right Going And the out contracted work into trenching from to we XXXX, XXXX. see ongoing oil still for work in XXXX. have and still now. the that of we in

for assets not saying the right now. taken are it's -- the trenching all date that So, we're

our also expansion renewables wind We're been has are been required. seeing for and North the Sea fishing where an has trenching compliance market farms primarily the geographically or where for trenching regulatory

off and for wind a where in other activity East. see and Middle more tender are the to coming starting We're is lot APAC farms Taiwan

So its trenching very But good year this for year. to essentially is the us. flat outlook that's

Owen Kratz

perhaps and there. much -- out farm we've more little bit short-term that's is more visibility work the of of we been far it's where we're our The it's on wind subject the that that a oil from far market, but a in long-term sort certain to visibility certain. It's have gas -- market outlook lumpy different And

say years that it have an we to but year. XXXX outlying be of It's than off going when on visibility less the we So, is XXXX back. coming concrete

Praveen Narra

Absolutely. very guys. Thank much you

Owen Kratz

Thank you.

Operator

question question. And of our next with Sabella. the proceed Michael Please from line comes your

Mike Sabella

all. Thanks of my deploying balance for the is more Hey, backdrop? kind ability from restricting lot lot broadly, good of rig have rigs. for morning really taking the on driller about a term? a think given peers, of If seen sheets a out of just call. playing the the over which would market reactivate than we longer the rates you them So capital do little to you normally push you How harder this to kind anticipate have that stress

Owen Kratz

the fifth floaters down not The much. have Well so the still really categories to All lower There's rigs. gen revival oversupply. aren't fourth different market harsh an are you rates. same. break the in the rig rig gen, into of The environment rigs enjoying a quite

rig the warrants the from far point rates reactivation. think I that are

don't back I'm the The the higher not not rigs costs I many to would rise, to see sit, put incurred plus expect number the it. rigs expect so reactivated into coming I the that to But -- longer the reactivation a that costs going on even market. see

right I believe just now, think about marketed rates. utilization on the is I at XX%, rate XX%

supply-demand We're on beyond tightening fundamentals XXXX of in the the the signs trigger point. spurs a could you driving cusp can rate meaningful am -- I don't market market see see where seeing the that actually of of I that gas beyond that XXXX oil trigger and exceed that increases. But to that the do see underlying -- point.

to rates the I to see high still enough don't or think though warrant capital XXXX, even you're reactivation. rig the going cost in

rig maximum XXXX, increase really that meaningful profitability being rates, see mean not rates I that us. -- XXXX So but for rig

Mike Sabella

Yeah. capital of helpful. when And then Great. circle to we That's back kind allocation. really

buyback. possibility guys of haven't you the talked So passed about

we of all M&A approach decision? firm that where a shareholders in net returning leverage sharing to of more you comfortable about you broader keeping before that allocation there really sort kind about capital XXXX that need of mind just allow fits cash to are know into If you kind start and territory target debt-neutral talk making that decisions. kind to would of Is

Erik Staffeldt

-- from think I Yeah, this Erik. is

I we standpoint, the towards from the driving think zero. net -- debt the from company are our

I rather factors than think there's multiple just leverage.

think Owen XXXX. need I we that as in do visibility definitely mentioned,

us slightly aggressive weaker would leverage a be Obviously, stronger allow position, market. our more a market in to

I be would conservative. think we obviously more

factors, low multiple general, obviously there's operating low in a -- we company. are but as leverage So, leverage

Owen Kratz

$XXX on size, gross I million I company debt. mind specifics it. can carried $XXX in should for some perhaps don't efficiency sharing A believe about our and to million

that a us I more likely see high million, around I'm see debt million. strong but prefer guy. -- can I million. $XXX a market, But $XXX $XXX to in You not

I $XXX and is carry million at where our face Liquidity-wise, that intent we That's very could balance. liquidity. And between may $XXX million cash us. that feel sort about comfortable think of try $XXX million we a the of and throw anything to market

far Now, plays that value how as into to returning as shareholders.

previously a shareholders greater think early. about that our what softer and create do the into to I creating question structure. with value Do the lending raised do capital a converts return gets there, ability therefore we liquidity, out and the greater to we

think be. depends how is XXXX that strongly to going off think really we I robust on

We're with share first of the ability the contract XXXX. into confidence renewals. quarter all builds all year, discussions shareholders. well back As strong in goes if to these dry value this said putting that setting I the our the a we're our up by And then of docks starting on

Mike Sabella

Thanks guys. great. That's much so

Operator

line with next James Schumm from Instructions] the Please question. question your [ph]. of [Operator proceed Our comes

Unidentified Analyst

Hey. good morning. Thanks and

Owen Kratz

Good morning.

Unidentified Analyst

the Sea. way my about the of as How two vessels answered, this? can project So renewable of think most about modeling support of help the in thinking with have most questions there but be we're you -- is should investors North economics energy been any us

Erik Staffeldt

Okay. I'll that take one.

lower it's First a vessels type all, doing two site its revenue much of work, clearance. small

these each large get ordinance So field are any of or remove wind development. of that the there have you out farms any the bonus that to way unexploded in

operator small farm removing the and for it's then surveys. So, those about wind site problems doing

the around boat of margins we're And on revenue the the $XX,XXX So a day. each doing on flexible a are depending day. is at type $XX,XXX work

are Both of well. us. first December vessels into year. the working have third is and we our activity RVs in is been There's seeing up. for And not really returns that because this a have customers we it's well very on in. enter that's we area more vote. quarter project target go the better to bid we're The that But lot an of into that, coming started the that focusing from could It something

we're to robotics diversify So looking offering. our

Unidentified Analyst

for the the up then second Thanks in XXK it well And great. looks like quarter. for lined that. IRS unit, one it's Okay,

expectation be Is XX% the in that XX% we early utilization range talked to range? but close this two a lot years Is I right of thinking this the to this know mean, now for the we be -- year. should of in think lower I the you've would in about -- past it's XXXX? a more XX% should I

Erik Staffeldt

expect now it line to previous with Right I years. would be in

and half well we We have go to one to to up similar. be to the client in do come of year, for back legacy a client. the lined somewhat one second utilization us expect that's back it's But

Unidentified Analyst

Thanks it. guys. Okay, great. Appreciate

Operator

Instructions] you. [Operator to call questions I'll at appear be the continue. any not this turn Please the do back in queue time. further to There

Erik Staffeldt

quarter Thanks interest for much joining appreciate forward very first on your us our look you participation We April. Thank in you. to having and XXXX today. call and

Operator

and disconnect rest day conclude your your of great thank that Have today's a presentation. everyone. the That lines. you We does you for participation ask please

Helix Energy Solutions (HLX) 25 Feb 202019 Q4 Earnings call transcript