Civeo(US:CVEO)2021-10-28 21:33Financial Data and Key Metrics Changes - In Q3 2021, Civeo reported total revenues of $155.1 million, with net income of $0.1 million or $0.00 per diluted share [12] - Adjusted EBITDA for the quarter was $26.2 million, operating cash flow was $33.9 million, and free cash flow was $31 million [12] - The net leverage ratio decreased to 1.86 times as of September 30, 2021, down from 1.98 times as of June 30, 2021 [17] Business Segment Data and Key Metrics Changes - Canadian segment revenues increased to $84.1 million from $71.8 million in Q3 2020, with adjusted EBITDA of $19.8 million, down from $21.3 million [13] - Australian segment revenues were $65.1 million, slightly up from $64.7 million in Q3 2020, but adjusted EBITDA decreased to $14.8 million from $21.5 million [14] - U.S. segment revenues were $5.9 million, down from $6.4 million in Q3 2020, with adjusted EBITDA improving to negative $0.5 million from negative $1.5 million [16] Market Data and Key Metrics Changes - The Canadian oil sands region saw a 21% year-over-year increase in billed rooms, totaling 613,000 [13] - In Australia, billed rooms decreased to 491,000 from 514,000 in Q3 2020, influenced by customer hesitancy in capital projects [14] - The U.S. lodge occupancy increased sequentially, although offshore work decreased [11] Company Strategy and Development Direction - The company is focused on free cash flow generation, debt reduction, and maintaining a conservative approach to capital allocation [6][9] - Civeo announced a share repurchase program for up to 5% of total common shares outstanding [6] - The company plans to prioritize safety, manage costs according to market outlooks, enhance hospitality offerings, and allocate capital prudently [22] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding improvements in commodity prices but noted that customer spending plans remain conservative [9][20] - The outlook for the Canadian segment is steady with expected strong mobile camp activity, while the Australian segment faces subdued customer spending and increased labor costs [19][20] - The U.S. segment is seeing gradual recovery, but rig counts lag behind commodity price movements [21] Other Important Information - Civeo replaced and refinanced its entire debt agreement, extending maturity to September 2025, providing more financial flexibility [17] - Total liquidity as of September 30, 2021, was approximately $78.2 million [17] Q&A Session Summary Question: What should be watched for improvement in the Australian markets next year? - Management indicated that announcements from customers regarding capital spending plans will be crucial for increased occupancy [25] Question: How will the return of capital to shareholders evolve? - Currently, the focus is on the share repurchase program, with no immediate plans to expand it beyond the 5% limit [26][27] Question: What is the opportunity in the global gas markets on the West Coast of Canada? - Management is monitoring the LNG Canada project for potential benefits to their operations [28][29] Question: What factors are driving the higher end of EBITDA guidance? - The increase is largely attributed to the Canadian business, particularly occupancy and pipeline construction camp activity [32] Question: What is needed for greater labor availability in Australia? - Easing of international borders and travel restrictions within Australia is necessary to improve labor supply [37]