Civeo(US:CVEO)2022-08-03 16:00Financial Performance - Civeo Corporation reported revenues of $184,954,000 for the three months ended June 30, 2022, representing a 20% increase from $154,176,000 in the same period of 2021[10]. - The company achieved a net income of $10,230,000 for the three months ended June 30, 2022, compared to a net income of $10,000 in the same period of 2021[13]. - Operating income for the three months ended June 30, 2022, was $14,242,000, significantly up from $2,129,000 in the prior year[10]. - Total revenues for the three months ended June 30, 2022, were $184.954 million, a 20% increase from $154.176 million in the same period of 2021[82]. - For the six months ended June 30, 2022, total revenues reached $350.632 million, up from $279.606 million in the same period of 2021, marking a 25.5% increase[82]. - Net income for the six months ended June 30, 2022, was $12,138 thousand, compared to a loss of $9,415 thousand for the same period in 2021[23]. - Net income attributable to Civeo for the six months ended June 30, 2022, was $10.0 million, or $0.60 per diluted share, compared to a net loss of $10.4 million, or $0.73 per diluted share, in the same period in 2021[142]. Assets and Liabilities - Civeo's total current assets increased to $169,724,000 as of June 30, 2022, compared to $157,193,000 at the end of 2021[15]. - The company reported total liabilities of $273,877,000 as of June 30, 2022, down from $309,623,000 at the end of 2021[15]. - Civeo's total assets decreased to $637,397,000 as of June 30, 2022, from $672,734,000 at the end of 2021[15]. - Total accounts receivable as of June 30, 2022, was $135.165 million, an increase from $115.220 million as of December 31, 2021[42]. - Total accrued liabilities as of June 30, 2022, were $28.289 million, a decrease from $33.564 million as of December 31, 2021[45]. - Outstanding debt as of June 30, 2022, was $154.6 million, down from $175.1 million at the end of 2021[172]. Cash Flow and Capital Expenditures - Net cash flows provided by operating activities for the six months ended June 30, 2022, were $23,631 thousand, down from $29,350 thousand in 2021[23]. - Capital expenditures for the six months ended June 30, 2022, totaled $8,647 thousand, compared to $6,530 thousand in 2021[23]. - Capital expenditures for 2022 are expected to be between $24 million and $29 million, significantly higher than $15.6 million in 2021[113]. - Total cash provided by operations during the six months ended June 30, 2022, was $23.6 million, down from $29.4 million in the same period of 2021[167]. Revenue Segmentation - The company operates in three principal reportable business segments: Canada, Australia, and the U.S., providing hospitality services to the natural resources industry[26]. - Approximately 64% of the company's revenue in Q2 2022 was generated from lodges in Canada and villages in Australia[88]. - Accommodation revenues in Canada for the three months ended June 30, 2022, were $79.431 million, up 13.8% from $69.759 million in the same period of 2021[33]. - The Canadian segment reported a revenue increase of $59.8 million, or 41%, compared to the same period in 2021, despite a $4.5 million decrease due to currency exchange rate fluctuations[154]. - The Australian segment's revenues increased by $7.7 million, or 6%, although a 7% decline in the Australian dollar relative to the U.S. dollar resulted in a $9.5 million decrease in revenues[159]. - The U.S. segment's revenues rose by $3.5 million, or 33%, driven by increased U.S. drilling activity[163]. Expenses and Profitability - Consolidated cost of sales and services rose by $22.1 million, or 20%, in Q2 2022, totaling $130.05 million[117]. - Selling, general and administrative expenses increased by $3.0 million, or 20%, in Q2 2022, reaching $17.68 million[120]. - Gross margin as a percentage of revenues improved from 24.8% in the first half of 2021 to 26.7% in the first half of 2022[156]. - The total cost of sales and services for the six months ended June 30, 2022, increased by $48.1 million, or 23%, compared to the same period in 2021[143]. Market Conditions and Outlook - Global oil prices increased to above $100 per barrel due to improved demand and reduced supply, exacerbated by the Russia-Ukraine conflict[94]. - The company provided an optimistic outlook, projecting a revenue growth of 10-15% for the next quarter, driven by increased demand in the oil and gas industry[201]. - The company is exploring potential acquisitions to enhance its service offerings, with a focus on companies that complement its existing operations[201]. - The company anticipates a stable demand environment, with a forecasted EBITDA margin of 30% for the upcoming fiscal year[201]. Shareholder Returns and Capital Management - During the six months ended June 30, 2022, Civeo repurchased 22,911 common shares at a weighted average price of $23.65 per share, totaling approximately $0.5 million[68]. - The company has authorized a common share repurchase program to repurchase up to 5.0% of its total common shares, approximately 715,000 shares, over a twelve-month period[67]. - Future dividends will depend on various factors, including financial condition and covenants associated with debt obligations[178]. Risk Management - The company is managing inflation risk through negotiated service scope changes and contractual protections due to increasing inflationary pressures impacting labor and food costs[93]. - A hypothetical 10% adverse change in the value of the Canadian dollar and Australian dollar would result in translation adjustments of approximately $24 million and $23 million, respectively[184].