Civeo(US:CVEO)2024-07-30 22:15Financial Data and Key Metrics Changes - Total revenues for the second quarter were $188.7 million, with net income of $8.2 million or $0.56 per diluted share [6] - Adjusted EBITDA was $31.3 million, with a year-over-year increase of 10% from $19.6 million [7][32] - Operating cash flow was $32.4 million, and free cash flow was $30.9 million [6] - The net leverage ratio decreased to 0.3 times as of June 30, 2024, with total liquidity of approximately $159 million [19] Business Line Data and Key Metrics Changes - Australian segment revenues increased to $108.6 million from $82.5 million in the second quarter of 2023 [16] - Canadian segment revenues decreased to $79.5 million from $95.5 million year-over-year, with adjusted EBITDA down to $17.2 million from $19.8 million [17] - Daily room rate for the Canadian segment decreased to $96 from $100 year-over-year [8] Market Data and Key Metrics Changes - Australian billed rooms increased to 625,000, up 6% from 588,000 in the second quarter of 2023 [36] - Billed rooms in Canadian lodges totaled 752,000, up from 724,000 in the second quarter of 2023 [37] Company Strategy and Development Direction - The company aims to grow Australian Integrated Services revenues to AUD500 million by 2027 [25][45] - The focus is on winning additional contracts and expanding existing customer relationships in the Integrated Services business [29][25] - The company is exploring opportunities to acquire additional villages to augment its portfolio [80] Management's Comments on Operating Environment and Future Outlook - Management expects occupancy in Australian villages to remain consistent through the third quarter, with a slight downtick in the fourth quarter due to holiday downtimes [27] - The company anticipates modest results in the latter half of 2024 for Canada due to the shift in turnaround activity [23] - Management remains cautious about the impact of wildfires in Western Canada but does not expect a material financial impact [42] Other Important Information - The company returned $10.3 million to shareholders through dividends and share repurchases during the second quarter [4] - Capital expenditures for the second quarter were $5.3 million, down from $6.9 million in the same period in 2023 [38] - The company is maintaining its full-year 2024 revenue guidance of $625 million to $700 million and adjusted EBITDA guidance of $80 million to $90 million [40] Q&A Session Summary Question: What are the growth opportunities in Australia for the next couple of years? - Management expects occupancy in Australian villages to remain consistent and is looking to add capacity in Bowen Basin [27][49] Question: Can you frame the opportunities for future LNG expansions? - Management noted that the LNG Canada project is nearing first production, impacting activity at Sitka [55] Question: What are the high-level factors influencing 2025 outlook? - Management indicated that capital investment in own villages and winning new contracts in Integrated Services will be key [62] Question: What is the status of the source gas opportunity for LNG Canada? - Management stated that entry into the source gas market would likely require an acquisition [65] Question: How do you view the Canadian room rates and potential rebound? - Management explained that lower prices are tied to higher volumes due to tiered pricing structures, and prices are expected to rise as turnaround volumes decrease [101][102]