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Tidewater(TDW) - 2021 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported a net loss of $35.3 million or $0.87 per share for Q1 2021, with revenue of $83.5 million, which is $8.4 million or 9% less than Q4 2020 [39][40] - Cash flow from operations for the quarter was $5.7 million, and free cash flow was $19.2 million, bolstered by working capital inflows and proceeds from vessel sales [10][47] - Net debt decreased to $23.1 million, down $14.4 million from the end of Q4 2020 [13][51] Business Line Data and Key Metrics Changes - The Americas segment reported revenue of $26.2 million in Q1, down from $32.1 million in Q4, with an operating loss of $1.7 million [53] - The Middle East and Asia Pacific region reported revenue of $24.4 million, down from $25 million in Q4, with an operating loss of $1.9 million [54] - The Europe and Mediterranean region reported revenue of $14.7 million, down from $15.8 million in Q4, with an operating loss of $8 million [55] - The West Africa region reported revenue of $15.6 million, up from $14.9 million in Q4, with an operating loss of $6.8 million [56] Market Data and Key Metrics Changes - Active utilization across the fleet was 78%, slightly down from the previous quarter, while deepwater fleet utilization rose by 6% compared to Q1 2020 [29] - Average day rates decreased to $9,993 per day in Q1 2021 from $10,267 per day in Q1 2020 [30] - The Middle East and Asia Pacific region saw active utilization jump to 84% compared to 78% in Q1 2020, with average rates increasing to $8,506 per day [31] Company Strategy and Development Direction - The company aims to optimize costs related to drydocks and minimize expenses associated with vessels in layup, targeting approximately $20 million in drydock costs for 2021 [20] - The company has designed a scalable infrastructure to adjust to market changes and remain free cash flow positive [14] - The company anticipates a recovery in demand in the second half of 2021, with expectations to reactivate some vessels in West Africa [32][33] Management's Comments on Operating Environment and Future Outlook - Management indicated that the worst of the pandemic is behind, with expectations for increased activity throughout 2021, especially in the latter half [41] - The company continues to face challenges due to COVID-related delays, particularly in regions like India and the Philippines, which supply a significant portion of mariners [23][24] - Management expects to achieve full-year margin guidance of 30%, despite ongoing pandemic-driven inefficiencies impacting revenue [22] Other Important Information - The company sold six vessels in the quarter for $11 million and has 18 vessels left in the assets held for sale category [16][50] - The company published its first sustainability report, highlighting its commitment to ESG initiatives and safety culture [25][26] Q&A Session Summary Question: What is the outlook for the recovery in the market? - Management expects the recovery to continue, with a return to pre-pandemic supply and demand levels anticipated by Q1 2022 [21] Question: How is the company managing its debt? - The company has repaid nearly $100 million of debt in 2020 and continues to manage its debt maturities confidently, with more cash than the bond maturity balance [51][52]