Civeo(US:CVEO)2019-04-26 19:39Financial Data and Key Metrics Changes - In Q1 2019, the company generated revenues of $109 million, an increase from $102 million in Q1 2018, and adjusted EBITDA of $16 million, up from $10 million last year [7][14] - Operating cash flow for the quarter was $6 million, with $3 million in debt repaid, offset by a negative foreign currency translation impact of $8 million [8][22] - The net loss on a GAAP basis was $17.5 million, or $0.11 per diluted share [14] Business Segment Performance - Canadian segment revenues were $66.8 million, down from $69.4 million in Q4 2018, with adjusted EBITDA declining to $10.2 million from $11.8 million [15][16] - Australian segment revenues were $28.4 million, slightly down from $29.7 million in Q4 2018, with adjusted EBITDA decreasing to $9.9 million from $11.7 million [18] - U.S. segment revenues declined to $13.4 million from $15.5 million, but adjusted EBITDA improved to $2.8 million from $1.9 million [20] Market Data and Key Metrics Changes - The Canadian segment faced challenges due to lower room demand from major customers and oil production curtailments, but was partially offset by $145 million from an insurance claim [9][10] - In Australia, the outlook remains positive due to strong met coal prices, which are expected to drive activity in the Bowen and Gunnedah basins [12][27] - The U.S. segment showed improved performance despite moderating drilling activity, with healthy occupancy levels in West Texas and North Dakota lodges [13][29] Company Strategy and Industry Competition - The company is focused on generating free cash flow, executing contract-backed investments in the Canadian LNG space, and selectively deleveraging its balance sheet [23][32] - The company aims to provide best-in-class service while managing costs and investing in attractive growth opportunities across key end markets [32] Management's Comments on Operating Environment and Future Outlook - Management expects an increase in turnaround and maintenance activity in Canada starting in Q2 2019, with significant impacts anticipated in Q3 [24] - The company anticipates improved occupancy related to LNG projects in British Columbia, with the Sitka Lodge expansion expected to be completed by the end of Q2 2019 [25][26] - In Australia, strong demand for met coal and iron ore is expected to support healthy cash flows and growing export volumes [27][28] Other Important Information - Total debt outstanding as of March 31, 2019, was $383.5 million, with total liquidity of approximately $66 million [22] - The company expects Q2 2019 revenues of $113 million to $118 million and adjusted EBITDA of $21 million to $23.5 million [30] Q&A Session Summary Question: Impact of LNG activity shifting to 2020 - Management indicated that some LNG-related activity is expected to shift from 2019 to 2020, with an estimated $50 million impact in 2020 and an additional $50 million in 2021 from pipeline contracts [34][36] Question: Overall occupancy levels and room rate prices - Management noted that room rates in Canada have contracted due to efforts to reduce costs in a lower oil price environment, but pricing has largely stabilized [39][41] Question: Increased CapEx in Australia - Management explained that the increase in CapEx is to reactivate existing rooms and prepare for anticipated demand growth, with total CapEx guidance for 2019 set at $40 million to $45 million [45][46]