Civeo(US:CVEO)2019-02-26 21:49Financial Data and Key Metrics Changes - In Q4 2018, the company generated revenues of $114.5 million, an increase from $101.3 million year-over-year, and adjusted EBITDA of $19.9 million, up from $13.3 million [5][13] - The net loss on a GAAP basis for Q4 was $12.8 million or $0.08 per diluted share [13] - For the full year 2018, total revenues were $466.7 million, with a net loss of $130.8 million or $0.83 per share [18] Business Segment Performance - Canadian segment revenues were $69.4 million in Q4, down from $76.8 million in Q3, with adjusted EBITDA decreasing to $11.8 million from $16.5 million [14][15] - Australian segment revenues were $29.7 million, slightly down from $31.1 million in Q3, with adjusted EBITDA at $11.7 million, down from $12.4 million [16] - U.S. segment revenues increased from $12.6 million to $15.5 million, driven by an offshore fabrication project, although adjusted EBITDA decreased to $1.9 million from $2.4 million [17] Market Data and Key Metrics Changes - In Australia, benchmark met coal prices settled above $220 per ton, supporting strong seasonal occupancy [10] - The Canadian oil sands market is expected to see a temporary slowdown due to production curtailments, but a normal turnaround schedule is anticipated for the second and third quarters of 2019 [22] Company Strategy and Industry Competition - The company is focusing on generating free cash flow, reducing debt, and expanding service offerings in key markets [26] - The outlook for Australia remains constructive, with expectations of increased capital project spending from major customers [23] Management's Comments on Operating Environment and Future Outlook - Management noted that the start of 2019 has been impacted by oil price uncertainty and global trade issues, which could affect customer spending [21] - For 2019, the company expects modestly down room nights in Canada but a 10% to 15% increase in adjusted EBITDA year-over-year [22][23] Other Important Information - The company repaid $22.9 million of debt during Q4 2018, with total outstanding debt at $379.2 million as of December 31, 2018 [19] - Capital expenditures for 2018 totaled $17.1 million, up from $11.2 million in 2017 [19] Q&A Session Summary Question: Utilization levels and room rate expectations for 2019 - Management expects modest increases in room rates in Canada, while occupancy may be slightly down due to early year softness [30][31] Question: Cash generation and CapEx allocation - The non-maintenance CapEx is directed towards refurbishing rooms and projects in Canada, with a focus on growth capital [33][34] Question: SG&A expenses and US gross profit margins - SG&A was impacted by lower annual bonuses and stock price decreases, while US margins were affected by a lower-margin offshore fabrication project [39][40] Question: Expansion opportunities in Australia - Management noted steady improvement in occupancy and profitability, but no significant expansion projects have moved forward yet [42][44] Question: 2020 outlook based on 2019 performance - Management indicated that the second half of 2019 could provide a positive trend into 2020, particularly with expected contributions from LNG projects [46][48]