Civeo(US:CVEO)2019-07-29 18:14Financial Data and Key Metrics Changes - In Q2 2019, the company reported revenues of $122 million, a decrease from $130 million year-over-year but an increase from $109 million in Q1 2019 [11] - Adjusted EBITDA for the quarter was $26.5 million, up from $24.5 million year-over-year and significantly higher than $16 million in Q1 2019 [11] - The company experienced a net loss of $15.3 million or $0.09 per diluted share [17] Business Segment Performance - Canada Segment: Revenue increased to $78.1 million from $66.8 million in Q1 2019, with adjusted EBITDA rising to $16.3 million from $12.2 million [18] - Australia Segment: Revenue rose to $31 million from $28.4 million in Q1 2019, with adjusted EBITDA increasing to $13 million from $9.9 million [20] - U.S. Segment: Revenue slightly declined to $13.1 million from $13.4 million in Q1 2019, with adjusted EBITDA decreasing to $2.6 million from $2.8 million [21] Market Data and Key Metrics Changes - Canadian market conditions were affected by limited takeaway capacity and oil price volatility, but there was a significant increase in LNG-related occupancy in British Columbia [12][13] - In Australia, occupancy improved due to higher met coal prices and increased customer activity in the Bowen Basin [14] - The U.S. segment showed steady performance despite a slight decline in drilling and completion activity [16] Company Strategy and Industry Competition - The company completed the expansion of the Sitka Lodge to support the LNG Canada project, which is expected to enhance EBITDA in the second half of 2019 [6] - A strategic acquisition of Action Industrial Catering in Australia was completed, expanding service offerings and geographic footprint [10] - The company aims to maximize free cash flow and reduce debt while exploring growth investments to enhance competitive positioning [33] Management's Comments on Operating Environment and Future Outlook - Management expects stronger oil sands build rooms in Canada for Q3 2019, driven by turnaround and maintenance activity [25] - The outlook for Australia remains positive due to healthy commodity prices, with expectations for modest improvement in build rooms [28] - In the U.S., a decrease in drilling and completion activity is anticipated in the second half of 2019 [30] Other Important Information - The company reported capital expenditures of $11.5 million in Q2 2019, with a total of $21.2 million year-to-date [23] - Outstanding debt as of June 30, 2019, was $405.3 million, reflecting a $21.8 million increase since March 31, 2019 [23] Q&A Session Summary Question: Increase in receivables and cash generation - Management noted that the increase in receivables was primarily due to revenue ramp-up in Canada, with most of the increase collected post-quarter [35] Question: Debt extension and credit facility - Discussions are ongoing with banks for an extension of the credit agreement, with positive feedback received so far [36][37] Question: Margin profile of contract extensions - Management confirmed that the pricing and margin profile of recent contract extensions would be consistent with prior agreements [38] Question: Guidance for Q3 and Q4 - The company expects strong build room improvements in Q3, but a softening in Q4 due to seasonal factors [40][41] Question: CapEx plans for the remainder of the year - CapEx is guided at $40 million to $45 million for the year, with a decrease expected in 2020 [46][48] Question: Impact of Action acquisition - The Action acquisition is expected to contribute approximately $60 million in revenues and $5 million in EBITDA next year, with potential for synergies [50][51]