Tidewater(US:TDW)2021-03-05 18:39Financial Data and Key Metrics Changes - Revenue for the year was $397 million, exceeding guidance of $385 million, with fourth-quarter revenue at $92 million, above the expected $81 million [7][9] - Gross margin for the fourth quarter increased by $10 million, resulting in a 90% incremental gross margin, indicating high operating leverage [9] - General and Administrative (G&A) expenses for the fourth quarter were $68 million, marking the eighth consecutive quarter of cost reductions [10] - Free cash flow for the year was $53 million, below the guidance of $69 million due to increased working capital tied up with a customer [11] Business Line Data and Key Metrics Changes - Active utilization across the fleet was down 4% year-over-year, but deepwater fleet utilization increased by 5% [34] - Average day rates across the fleet rose approximately 8% to $10,750 compared to Q4 2019 [34] - The Americas region reported an operating profit of $1.5 million for the fourth quarter, despite having seven fewer active vessels [41] Market Data and Key Metrics Changes - The Middle East and Asia Pacific region saw average day rates increase to $9,002 per day, up from $7,746 in Q4 2019 [36] - West Africa experienced a significant drop in vessel revenues, down $12.4 million compared to the previous quarter, with an operating loss of $27.5 million for the year [37] - Europe and Mediterranean region's average day rate improved slightly to $12,368 per day, but overall vessel revenues decreased by 32% compared to 2019 [39] Company Strategy and Development Direction - The company is focused on generating more cash by operating fewer vessels at higher day rates while maintaining lower operating and G&A costs [44] - Ongoing transformations include enhancing technological capabilities and reducing carbon emissions through fleet upgrades and partnerships with customers [25][22] - The company aims to dispose of vessels that do not align with its goals and evaluate acquisitions that further its mission [25] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for 2021, anticipating a reversal of the previous year's challenges, with expectations of improved tendering activity in the second half of the year [27] - The company expects gross margin percentages of approximately 30% for 2021, with G&A costs projected to be around $70 million [28][29] - Management noted that the industry is recovering from the pandemic, with a focus on maintenance activity expected to drive demand [50] Other Important Information - The company has $34 million in assets held for sale, which it plans to dispose of depending on market conditions [30] - The company has successfully integrated advanced technology across its fleet, enhancing operational efficiency and reducing emissions [17][21] Q&A Session Summary Question: What was the gross margin guidance? - Management provided a gross margin guidance of 30% [46] Question: Is there any revenue guidance? - Management indicated that 2021 should be viewed as a reversal of 2020, expecting to be level with last year but optimistic about the second half [47] Question: What needs to happen for a material increase in day rates? - Management highlighted that a balance of supply and demand is crucial, with a resurgence in maintenance activity and attrition of vessels expected to drive day rates up [49][51] Question: What is the effective utilization figure across the industry? - Management estimated utilization levels in the mid-70s range, with better companies achieving high 80s to low 90s [52][53] Question: Is an increase in demand for PSVs necessary for day rate increases? - Management confirmed that an increase in demand for PSVs is essential for pushing prices higher [55]