Expro(US:XPRO)2022-05-05 20:16Financial Performance - The company reported a sequential analysis of financial results, comparing the most recently completed quarter to the immediately preceding quarter to provide relevant insights into business performance [107]. - Revenue for the three months ended March 31, 2022 decreased by $15.2 million, or 5.1%, to $280.5 million compared to $295.7 million for the three months ended December 31, 2021 [136]. - The net loss for the three months ended March 31, 2022 was $11.1 million, a significant improvement from a net loss of $91.2 million for the three months ended December 31, 2021 [136]. - Adjusted EBITDA for the three months ended March 31, 2022 decreased by $13.7 million, or 27.1%, to $36.8 million from $50.6 million for the three months ended December 31, 2021 [136]. - Adjusted EBITDA margin decreased to 13.1% during the three months ended March 31, 2022, compared to 17.1% during the three months ended December 31, 2021 [136]. - Adjusted Cash Flow from Operations for the three months ended March 31, 2022 was $(1.4) million, compared to $41.1 million for the three months ended December 31, 2021 [138]. Segment Performance - NLA segment revenue was $103.9 million for the three months ended March 31, 2022, an increase of $3.5 million, or 3.5%, compared to the previous quarter [140]. - ESSA segment revenue decreased by $12.3 million, or 13.0%, to $82.1 million for the three months ended March 31, 2022, primarily due to lower customer activity levels [142]. - MENA segment revenue increased by $1.2 million, or 2.5%, to $50.7 million for the three months ended March 31, 2022, driven by equipment sales in the UAE and Saudi Arabia [144]. - APAC segment revenue decreased by $7.7 million, or 14.9%, to $43.8 million for the three months ended March 31, 2022, due to lower customer activities and non-recurring equipment sales [146]. - Revenue for the NLA segment was $103.9 million for the three months ended March 31, 2022, an increase of $73.5 million, or 242.1%, compared to the same period in 2021, primarily due to the Merger [153]. - Segment EBITDA for the NLA segment was $21.8 million, or 21.0% of revenues, during the three months ended March 31, 2022, compared to $2.4 million, or 8.0% of revenues, during the same period in 2021, an increase of $19.4 million [154]. - Revenue for the ESSA segment was $82.1 million for the three months ended March 31, 2022, an increase of $28.5 million, or 53.0%, compared to the same period in 2021, with $24.2 million attributable to the Merger [155]. - Segment EBITDA for the ESSA segment was $11.9 million, or 14.5% of revenues, during the three months ended March 31, 2022, compared to $5.4 million, or 10.0% of revenues, during the same period in 2021, an increase of $6.5 million [156]. - Revenue for the MENA segment was $50.7 million for the three months ended March 31, 2022, an increase of $9.5 million, or 23.2%, compared to the same period in 2021, with $6.3 million attributable to the Merger [158]. - Segment EBITDA for the MENA segment was $15.5 million, or 30.5% of revenues, during the three months ended March 31, 2022, compared to $15.1 million, or 36.6% of revenues, during the same period in 2021 [159]. - Revenue for the APAC segment was $43.8 million for the three months ended March 31, 2022, an increase of $12.7 million, or 40.7%, compared to the same period in 2021, with $7.3 million attributable to the Merger [160]. - Segment EBITDA for the APAC segment was $5.4 million, or 12.4% of revenues, during the three months ended March 31, 2022, compared to $5.2 million, or 16.6% of revenues, during the same period in 2021 [161]. Market and Economic Outlook - Oil demand is forecasted to exceed 2021 levels, with an estimated increase of 2.4 million barrels per day in 2022, reaching 99.8 million b/d, and further rising to 101.7 million b/d in 2023 [121]. - The EIA projects Brent crude oil prices to average $104 per barrel in 2022 and $92 per barrel in 2023, compared to an average of $71 per barrel in 2021 [121]. - The market for oilfield services is heavily influenced by oil and gas prices, which affect customer spending on exploration and production activities [119]. - The company faces uncertainty regarding global crude oil demand and prices, which may lead to significant reductions in oil and gas activity, impacting demand for its products and services [180]. - Ongoing restrictions due to COVID-19 may affect commercial and economic activities, creating uncertainty about the timing and extent of economic recovery in the United States and globally [180]. Strategic Initiatives - The company expects demand for its services to trend positively throughout 2022, particularly in brownfield and production enhancement services [124]. - The clean energy transition is gaining momentum, with the company actively developing technologies in carbon capture and geothermal sectors [124]. - The company is committed to developing local capabilities and personnel to reduce dependence on international staff, enhancing operational resilience during the pandemic [124]. - There is a focus on the ability to develop new technologies and products, which is critical for future growth [180]. - The company emphasizes the importance of protecting intellectual property rights and attracting qualified personnel [180]. - The transition of the global energy sector from fossil fuels to renewable energy sources is a significant factor influencing future strategies [180]. - Integration and realization of expected synergies following the completion of the merger remain uncertain [180]. Risks and Challenges - The company is exposed to unique risks associated with offshore operations and political, economic, and regulatory uncertainties in international markets [180]. - Severe weather conditions, natural disasters, and operational interruptions pose risks to the company's operations [180]. - Market risk exposure has not changed materially since December 31, 2021, indicating stability in this area [181].