Expro(US:XPRO)2024-04-25 20:23Financial Performance - Net cash provided by operating activities for Q1 2024 was $29.9 million, down from $32.8 million in Q4 2023, primarily due to a decrease in Adjusted EBITDA by $17.6 million and the non-repeat of $5.6 million in dividends from joint ventures [134]. - Revenue for the three months ended March 31, 2024, decreased by $23.3 million, or 5.7%, to $383.5 million compared to $406.8 million for the three months ended December 31, 2023 [135]. - Net loss for the three months ended March 31, 2024, was $2.7 million, compared to a net loss of $12.4 million for the three months ended December 31, 2023, resulting in a net loss margin of (0.7)% [135]. - Adjusted EBITDA for the three months ended March 31, 2024, decreased by $17.6 million, or 20.7%, to $67.5 million from $85.1 million for the three months ended December 31, 2023, with an Adjusted EBITDA margin of 17.6% [135]. Segment Performance - Revenue for the NLA segment was $130.4 million for the three months ended March 31, 2024, a decrease of $15.1 million, or 10.4%, compared to $145.5 million for the three months ended December 31, 2023 [146]. - Segment EBITDA for the NLA segment was $34.4 million, or 26.4% of revenues, a decrease of $9.9 million, or 22.3%, compared to $44.3 million, or 30.5% of revenues, for the three months ended December 31, 2023 [147]. - Revenue for the ESSA segment was $121.7 million for the three months ended March 31, 2024, a decrease of $12.1 million, or 9.0%, compared to $133.8 million for the three months ended December 31, 2023 [148]. - Segment EBITDA for the ESSA segment was $25.2 million, or 20.7% of revenues, a decrease of $15.8 million, or 38.5%, compared to $41.0 million, or 30.6% of revenues, for the three months ended December 31, 2023 [149]. - Revenue for the MENA segment was $71.5 million for the three months ended March 31, 2024, an increase of $6.1 million, or 9.3%, compared to $65.4 million for the three months ended December 31, 2023 [150]. - Segment EBITDA for the MENA segment was $24.5 million, or 34.3% of revenues, an increase of $3.2 million, or 15.0%, compared to $21.3 million, or 32.5% of revenues, for the three months ended December 31, 2023 [151]. - Revenue for the NLA segment was $130.4 million for the three months ended March 31, 2024, an increase of $4.2 million, or 3.3%, compared to the same period in 2023 [161]. - Segment EBITDA for the NLA segment was $34.4 million, or 26.4% of revenues, an increase of $2.5 million, or 7.8%, compared to the same period in 2023 [162]. - Revenue for the ESSA segment was $121.7 million for the three months ended March 31, 2024, an increase of $8.1 million, or 7.1%, compared to the same period in 2023 [163]. - Segment EBITDA for the ESSA segment was $25.2 million, or 20.7% of revenues, an increase of $4.4 million, or 21.2%, compared to the same period in 2023 [164]. - Revenue for the MENA segment was $71.5 million for the three months ended March 31, 2024, an increase of $20.6 million, or 40.5%, compared to the same period in 2023 [165]. - Segment EBITDA for the MENA segment was $24.5 million, or 34.3% of revenues, an increase of $9.9 million, or 67.8%, compared to the same period in 2023 [166]. - Revenue for the APAC segment was $59.9 million for the three months ended March 31, 2024, an increase of $11.4 million, or 23.5%, compared to the same period in 2023 [167]. - Segment EBITDA for the APAC segment was $10.8 million, an increase of $13.5 million compared to a loss of $2.7 million for the same period in 2023 [168]. Market Outlook - Average daily oil demand in Q1 2024 exceeded 2023 levels, with liquid demand expected to grow by 0.8 million b/d in 2024 over 2023 [119]. - Brent crude oil prices increased from an average of $80/bbl in January to $85/bbl in March 2024, driven by geopolitical tensions and OPEC+ supply cuts [119]. - Global liquids fuels consumption is forecasted to average 102.9 million b/d in 2024, increasing by 0.9 million b/d over 2023 [121]. - Global liquid fuels production is expected to average 102.6 million b/d in 2024, an increase of 0.8 million b/d over 2023 [122]. - The EIA expects oil prices to average $90/bbl in Q2 2024 and $89/bbl for the entire year [123]. - The market outlook for 2024 remains positive, with strong prices driving growth in exploration and production expenditures [126]. - Demand for services and solutions is expected to continue trending positively throughout 2024 [127]. Operational Challenges - The company suspended vessel-deployed light well intervention operations in Q3 2023 due to a wire failure, and is currently assessing the situation and pursuing an insurance claim [134]. - Continuing uncertainty regarding global crude oil demand and prices may lead to significant reductions in domestic oil and gas activity, impacting demand for products and services [191]. - Uncertainty about the timing and extent of economic recovery or recession in the U.S. and other countries will likely affect crude oil demand and commercial opportunities [191]. - Unique risks associated with offshore operations include the ability to recover and economically repair equipment located on the seabed [191]. - Political and regulatory uncertainties in international operations, including OPEC and non-OPEC production level impacts [191]. - The company's ability to develop new technologies and products while protecting intellectual property rights is crucial [191]. - Attracting, training, and retaining key employees and qualified personnel remains a significant challenge [191]. - The overall transition of the global energy sector from fossil-based systems to renewable energy sources is ongoing [191]. - Perception related to environmental, social, and governance (ESG) performance and future ESG reporting requirements is critical [191]. - Market risk exposure has not changed materially since December 31, 2023 [193]. Capital Expenditures and Liquidity - Total available liquidity as of March 31, 2024, was $291.2 million, including cash and cash equivalents of $164.5 million [176]. - Total capital expenditures are estimated to range between $100.0 million and $110.0 million for the remaining nine months of 2024 [177].