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Helix Energy Solutions(HLX) - 2021 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenues for Q4 2021 were $169 million, with a net loss of $26 million and EBITDA of $9 million, compared to revenues of $675 million and a net loss of $62 million for the full year 2021 [10][11] - The gross profit for Q4 was negative $5 million, resulting in a gross profit margin of negative 3%, while the full year gross profit was $15 million with a gross profit margin of 2% [10][14] - The company achieved a negative net debt balance of $22 million by the end of 2021, with a cash balance of $254 million and $74 million in temporarily restricted cash [11][33] Business Line Data and Key Metrics Changes - The well intervention fleet achieved global utilization of 56% in Q4, with 52% in Brazil and 89% in the Gulf of Mexico, while the robotics chartered vessel fleet achieved 99% utilization globally [15][16] - The Siem Helix 2 in Brazil operated with 100% utilization, completing abandonment and production enhancement work [22] - The robotics segment completed various projects, including trenching and ROV support, with strong performance in renewables-related projects [24][27] Market Data and Key Metrics Changes - The Gulf of Mexico market showed strong recovery signs with increasing rates and utilization expected for the Q4000 and Q5000 vessels [41] - The North Sea market is anticipated to be the slowest to recover, with low utilization in Q4 but expected improvements in Q2 and Q3 [19][38] - In West Africa, the Q7000 vessel had 99% uptime, indicating strong operational performance [20] Company Strategy and Development Direction - The company aims to strengthen its energy transition story by enhancing existing production, expanding abandonment capabilities, and broadening offerings in the renewables market [51][52] - The strategy includes focusing on mature fields and providing cost-effective abandonment solutions, as well as increasing capabilities in the renewables sector [51][52] Management's Comments on Operating Environment and Future Outlook - Management expects Q1 2022 to be the weakest quarter due to seasonal downturns and regulatory maintenance for several vessels, with a robust recovery anticipated in the second half of 2022 [36][47] - The company is cautious about providing quantitative guidance for 2022 due to market variability but anticipates strong visibility for the second half of the year [36][50] Other Important Information - The company achieved a long-standing financial goal of reaching net debt 0 and ending the year in a negative net debt position [11] - The company is seeing increased tender activity and expanding its geography and client base for well enhancements and robotics [30] Q&A Session Summary Question: Is it reasonable to model flat working capital this year? - Management indicated that the expectation would be flat working capital, with some variability due to transit towards the APAC region [56] Question: What should be expected regarding free cash flow this year? - Management refrained from issuing guidance on free cash flow due to variability affecting top line and EBITDA generation [56] Question: What are the economics of an ROV spread versus a typical trencher spread? - Rates for ROV spreads range from $60,000 to $80,000 per day, while trenching spreads are above $100,000, with hard cutting spreads around $120,000 [63][64]