Helix Energy Solutions(US:HLX)2021-07-27 20:26Financial Data and Key Metrics Changes - For Q2 2021, the company reported revenues of $162 million, a slight decrease from $163 million in Q1 2021, with a net loss of $14 million and EBITDA of $25 million [7][12][28] - The gross profit was $3 million, representing a gross profit margin of 2% [7][12] - The cash balance at the end of the quarter was $244 million, with an additional $71 million in temporarily restricted cash [8][26] - Year-to-date, the company generated $93 million of operating cash flow and $86 million of free cash flow [8] Business Line Data and Key Metrics Changes - The Well Intervention fleet achieved global utilization of 72%, with 100% utilization in Brazil, 58% in the Gulf of Mexico, and 63% in the North Sea and West Africa [12][16] - The Robotics chartered vessel fleet achieved 93% global utilization, with significant activity in trenching and renewable projects [12][20] - In Brazil, both vessels achieved 100% utilization, completing abandonment work on multiple wells [19] Market Data and Key Metrics Changes - The Gulf of Mexico market showed signs of increased activity, with 15 projects awarded since the last earnings call, totaling over 400 days of utilization [52] - The North Sea market has been slower to recover, but there is anticipation of increased work in 2022 and 2023 due to aging wells [52][40] - West Africa has been a positive market for the company, with the Q7000 vessel expected to remain utilized into November 2021 [42] Company Strategy and Development Direction - The company is focusing on enhancing its service offerings in the renewable sector and is seeing increased demand for trenching services [46][47] - There is a strategic shift towards pursuing opportunities outside of Brazil, with potential markets identified in West Africa and Australia [64] - The company aims to maintain a modern fleet and is planning for a potential return to shareholder value once market conditions improve [55][56] Management's Comments on Operating Environment and Future Outlook - Management characterized 2021 as a challenging year but noted signs of an economic recovery, particularly in the Gulf of Mexico [36][40] - There is cautious optimism regarding the recovery of the rig market, which is expected to drive demand for intervention services [37][40] - The company anticipates a stronger market in 2022 and 2023, particularly in the North Sea and Gulf of Mexico [40][44] Other Important Information - The company has a capital expenditure forecast range of $20 million to $35 million, primarily for maintenance and project-related expenses [34] - The company expects to benefit from the new HWCG agreement for production enhancement services [30] Q&A Session Summary Question: Demand recovery in the Gulf of Mexico - Management noted increased discussions with clients and awarded 15 projects since the last earnings call, indicating a potential recovery in demand [52] Question: Balance sheet and capital allocation for 2022 - The company aims to achieve net debt zero by next year and is holding cash to settle convertible notes, with plans to return value to shareholders once market conditions improve [55][56] Question: Is 2021 the bottom for EBITDA? - Management indicated uncertainty regarding whether 2021 or 2022 is the bottom year, but expects a significant recovery by 2023 [59] Question: Competitive positioning of Siem vessels outside Brazil - Management stated that Siem vessels are competitive in other markets, with similar capabilities and cost bases to other vessels [75] Question: Outlook for larger projects in site clearance - Management expects an increase in larger projects in 2023, with ongoing discussions for additional contracts [77]